Morning Brief: Paulson Sees End To Fannie, Freddie
Treasury Secretary Henry M. Paulson, Jr. on Wednesday laid out a vision in which the two local mortgage giants Fannie Mae and Freddie Mac would no longer exist. In his final speech scheduled as Treasury secretary, Paulson proposed replacing mortgage-finance companies with highly regulated utilities that would play a more limited role in making money available for home loans.
Paulson spoke at the Economic Club of Washington and discussed ways to reshape the nation's housing finance system. With his tenure expiring, his opinions will carry little formal authority, but few officials have had as intimate a look at the two companies as Paulson.
Paulson completes a 2 1/2 -year term as the nation's chief economic policymaker when the Bush administration wraps up Jan. 20. Paulson's legacy largely will be shaped by his response to the financial crisis over the past year, including his orchestration of the government takeover of Fannie and Freddie in early September.
In other local business news, a familiar face will return to Marriott International's board of directors. Former Massachusetts governor and presidential candidate Mitt Romney has been
reappointed to the board, the Bethesda hotel company said yesterday.
Romney, the former chief executive of Bain Capital, served on Marriott's board for 10 years before resigning to run for governor in 2002. He was also chief executive of the Salt Lake City Winter Olympics Organizing Committee.
At Marriott, he will chair a newly formed finance committee, overseeing the company's financial performance and how it spends money.
"Gov. Romney has repeatedly demonstrated leadership and courage in successfully taking on difficult and complex issues in business, government and the non-profit sector," Marriott chief executive J.W. "Bill" Marriott Jr. said in a statement. "He will provide strong guidance as our company navigates the challenges of the dynamic global financial system and economy."
And in budget news, both the states of Virginia and Maryland are preparing for tough choices. The Maryland General Assembly prepares to convene this month in a somber mood, ready to tackle deep spending cuts as the tax revenue that funds state services has plummeted in the sagging economy.
The state's 47 senators and 141 delegates will begin their annual 90-day session Jan. 14 facing a significant potential budget shortfall. Leaders say they expect few state priorities to be spared and the shortage of money to dominate legislative discussions.
In Richmond, Virginia legislators return to the state Capitol next week for a 45-day session that will focus on cutting $3 billion from Virginia's two-year budget, as the state faces one of its worst financial crises of modern times.
Legislators will consider several proposals by Gov. Timothy M. Kaine (D), including raising taxes on cigarettes and borrowing millions from the state's rainy-day fund, before voting on changes to the two-year, $77 billion spending plan.
January 8, 2009; 9:01 AM ET
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