See this commentary piece on Bloomberg:
How the Democrats Created the Financial Crisis The key things you wanted to know was why are Fannie Mae and Freddie Mac so important to this scandal.
From the piece, we have:
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
And
Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.
The two were so large a part of the market that their sheer size and presence dominated the subprime loan market. So when they exploded, their detonation took out a lot of others, such as Bear Stearns, Lehman, AIG, and so on.
On the bill, there was never an actual filibuster as I had said before. I had said that the mere threat of one was enough to stop a bill. And it's far more common than you think. Filibusters themselves rarely happen but the threat of one is almost constant. It's so common that for virtually every bill, there is automatically a cloture vote with an assumption that a filibuster will happen. Such is the distrust between the two parties. That is one reason Congress can rarely get anything done that doesn't have a consensus between the two parties. No party has had 60 votes in the Senate since Jimmy Carter was president.
The reason why a threat is as good as a filibuster is that nobody actually has to debate, unlike in the old days when the lack of debate immediately ended the filibuster. Today, all a Senator has to do to initiate a filibuster is to say, "I'm holding a filibuster." And that's it. There's no debate, no Senate session, no nothing. A vote cannot take place on any bill without a 60-vote cloture.
The filibuster does have an exception. Budget bills cannot be filibustered. So when the Senate is voting on spending measures for the overall budget, those cannot be filibustered. Everything else is fair game. Of course, you can guess what happens with these bills. They get decorated like Christmas trees with all sorts of pork barrel projects and other items that could never stand on their own simply because they cannot be filibustered.
The relevant part of this piece that you were interested in is:
But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.
If you watched the video, you would know how partisan it became as Democrats attacked the regulator and refused to acknowledge a problem existed. They had no interest in reform. We're paying the price for that lack of interest.
The 2005 bill was not the first. Why did the Democrats block this:
New Agency Proposed to Oversee Freddie Mac and Fannie Mae Seventeen times, the Administration tried to reform the two GSE. Seventeen times they were blocked. You're treating this whole thing as a one-time blockage of a single bill and focusing only on the 2005 bill. It's been a series of obstruction by Democrats to prevent reforms of the two GSE's over a number of years from 2001 on, so there is no excuse.
