Apparently throwing an earlier veto threat out the window, President Bush said in a press conference Tuesday that Congress needed to speed up its work to pass a massive housing aid package that currently sits with House leaders for revision after passing the Senate last week.
"There are just 26 legislative days left before the end of the fiscal year," he said in prepared remarks. "This means that to get their fundamental job done, Congress would have to pass a spending bill nearly every other day. This is not a record to be proud of, and I think the American people deserve better."
Bush urged Congress to pick up the pace on a housing bill that would give the Federal Housing Administration
authority to insure an additional $300 billion in troubled subprime mortgages, as well as establishing a new regulator for ailing housing finance giants Fannie Mae (FNM)
and Freddie Mac (FRE)
. Lawmakers agreed in principle on Monday to add the provisions pushed for by Bush administration officials that would give the Treasury greater capacity to backstop the operations of both GSEs.
House Financial Services Committee chairman Barney Frank (D-MA) said he believes Congress can deliver a final bill to President Bush by the middle of next week.
"Turmoil in the American mortgage markets is at the root of a financial crisis that has undermined confidence in and threatens the stability of the global financial system," he said. "Congress will soon send the president a comprehensive package of legislation that makes future crises less likely."
Bush veto threat gone?
The President has at time issued stern warnings over a possible veto of the housing package -- a warning that was not mentioned or repeated in Tuesday's press conference, leading some to suggest that the administration has backed off some of its earlier demands tied to the package.
"Inclusion of the Treasury proposal likely forced some compromises," said one of HW's sources on Capitol Hill, who asked not to be named.
The largest source of Bush's veto threat had centered around a proposed provision in the Senate that would add $3.9 billion in Community Development Block Grant funding to allow local governments to purchase foreclosed and abandoned real estate for use as affordable housing. The House version of the package contains no such provision, and so-called "Blue Dog" Democrats — a name given to a group of conservative Democrats in the House — have been strongly opposed to the measure, as well.
It remained unclear what the adminstration's stance around the CDBG proposal was by Tuesday, and similarly unclear if the House was planning to negotiate for the provisions removal from the final bill expected to head to the President.
In a Q&A session with reporters, Bush reiterated the administration's stance that Fannie and Freddie remain public entities, but suggested that the troubles ailing the mortgage giants were distinct from the nation's larger banking woes that claimed IndyMac Bank last Friday.
"These are two different instances -- mortgage markets on the one hand, banking on the other," he said.
Disclosure: The author was long FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.