I'm back. Thanks for the kind words, Ann.
Seriously.
The Bloomberg article author is associated with the McCain campaign. Hmm.
What makes the FM/FM situation so murky in the gov't is that the actual negotiations are unclear (there's reports about party alliances, but no official voting ever took place as far as I know), there is a lot of hearsay, partisan speculation and few straight conclusions. This is what I’ve pieced together--I am limiting it to the FM/FM situation and that strict time period linked to the bills. Since it's all so muddy, I'm afraid your question doesn't get answered, Ann one way or another. But still, the situation is interesting to flesh out, I think.
First for a general timeline and our factions let’s go back to the
Sept. 11, 2003 NYT .
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
Okay, so we have that set-up. The Administration wanted to regulate FM/FM in 2003. The Republicans seemed to agree. The Democrats did not, (see possible reasons
here , if you want to give them the benefit of the doubt).
Fast forward to
2005. There’s two bills that were in play, which is another reason why this is so messy.
House bill Federal Housing Finance Reform Act of 2005 HR 1461, gets introduced April 2005 put for by chairman Michael Oxley (R) and was voted on by 10/26/05 (a 331-90 vote) after much wrangling. It got passed on to the Senate where it was shelved by the Banking, Housing, and Urban Affairs Committee.
Oxley said some controversial stuff in
here . A conservative
disputes Oxley's criticism and mentions, interestingly enough, that a bipartisan vote in the House was not needed as one of the responses against him.
Speaking very generally—what emerges is that there’s the Administration on one side, there’s the Democrats on the other and in the middle there seem to be the Republicans (reminds me a bit of the bailout situation though the configuration was obviously different). The reason that Oxley says the Administration gave him the “one finger salute” is because they were less than pleased with the bill that the House passed considering it too weak according to American Enterprise Institute, a conservative think tank (by the way the same one the Bloomberg author works for). However, if I go by the conservative in the website above, I'm left wondering (like you) how important the bill was thought to be by the Republicans that they'd sell out the content of the bill (and White House support) in favor of bipartisanship. According to Oxley the Administration basically said that no bill was better than that one.
But about him-- there’s also been information of money in his pockets from lobbyists in a fishy way as in
WSJ from April 2006.
Oxley
responds on May 2006 and he makes a point here on the Administration. I’ll return to that eventually:
I applaud the Journal's point about the current administration potentially exercising authority to limit Fannie and Freddie's debt issuance. I concur that the administration possesses the full authority necessary to move forward. There is no need for congressional approval. If administration officials believe that the systemic risk is so great that the Treasury should limit debt issuance and therefore portfolio size, I see nothing that prevents them from doing so. If that is their firm belief, then it is also their responsibility to protect the taxpayers and the housing finance system.
The House acted first. It has spoken with strong, bipartisan legislation to create a more effective regulator. We in the House urge the Senate to move and stand ready to complete the legislative process. The administration has the ability to act at any time.
Like I said, I’ll return to the Administration later, but I wanted to flag it.
By this point, the House bill was stalled in the Senate’s Banking, Housing, and Urban Affairs Committee. Let’s look at the other Senate bill.
That bill, the Federal Housing Enterprise Regulatory Reform Act of 2005, S190, differs from the House bill in that it was more in line with what the Administration wanted. It was sponsored by Sen. Hagel with co-sponsors Sen. Dole and Sen. Sununu (all Republicans) on 1/26/05. (McCain’s support is dated 5/25/06 btw and he didn't sign on to the next one while Sen. Dole and Sen. Sununu did). It passed to the Senate in 7/28/05, but was never placed on the agenda; there were two floor speeches (Hagel-2005 and McCain-2006) and that was it.
What most people point to is the committee where the initial partisan divisions took place (though not on official terms), Let’s take a look:
Richard Shelby (Ala.-R), Chairman, Robert Menendez (N.J.-R), [b]Robert Bennett (Utah-R), Wayne Allard (Colo.-R), Mike Enzi (Wyo.-R), Chuck Hagel (Neb.-R), Rick Santorum (Pa.-R), Mike Crapo (Idaho-R), John E. Sununu (N.H.-R), Elizabeth Dole (N.C.-R), Mel Martinez (Fla.-R)
Paul S. Sarbanes (Md.-D), Christopher Dodd (Conn.-D), Tim Johnson (S.D.-D), Jack Reed (R.I.-D), Chuck Schumer (N.Y.-D), Evan Bayh (Ind.-D), Thomas R. Carper (Del.-D), Debbie Stabenow (Mich.-D), Jim Bunning-R (Ky.-D).
Information from
here scroll down to 109th Congress.
From this we see that 1) the sponsor and co-sponsors of the bill sat in the committee and that these were senior Senators. And 2) we know that the Dems didn’t like it. 3) We know there was pressure from the NAHB. 5)We know it was taken out of committee, but never put to a vote on the floor. But that’s as far as the barest facts take us.
Now, let’s go back to the Administration.
Oxley’s credibility can be seen as kind of shaky, I suppose, but the original Wall Street Journal put the idea forth first and conservative think tank
American Enterprise Institute also backs the notion that an intervention from the Administration was needed and possible. On Sept. 2005, one of their people wrote:
After the administration and the Fed have declared that the GSEs’ portfolios are a dangerous source of taxpayer and systemic risk, the administration can hardly do nothing if Congress fails to act. In this respect, the administration always has a card to play--it can always use the Treasury’s authority to restrict the GSEs’ issuance of debt.
That the Dems didn't want it is widely known, so there's no need to rehearse that. What I'm drawn to is that not only is there little evidence of Republicans pushing back on the issue in a substantive way, but that the Administration didn't act decisively either even though they were the ones that started the push...even when conservatives both in and out of government encouraged they act. And this is just one part of the financial crisis, which definitely lines up with Factcheck's claim of a murky, complicated number of factors.
In this situation alone, it seems to me there are more questions than answers. For some more details
Slate\'s coverage looks pretty legit, even though it's Slate. But they have good links.
Here\'s some more on the House bill also.
Calling the Democrats' bluff, or allowing them to filibuster themselves into a corner, would have done precisely that.
*nods* At the very least it would have called more attention to the matter.
alcyone
