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Who killed The Federal Housing Enterprise Regulatory Reform Act of 2005?

obvious Child

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The Federal Housing Enterprise Regulatory Reform Act of 2005 is currently being cited as McCain's attempt to stop the current crisis and its death was at the hands of the democrats.

There's a couple things potentially wrong with that. First of all, McCain was merely a co-sponsor. Hagel was the primary backer of the bill. Second, the bill went to the Senate Committee on Banking, Housing, and Urban Affairs in 2005. That would be the 109th Congress. At the time, the Senate Committee on Banking, Housing, and Urban Affairs was controlled by the GOP. Richard Shelby (Alabama R) was the chairman and Paul S. Sarbanes was the ranking member. You may remember him from the Sarbanes-Oxley act. The GOP had a two person majority over the Democrats.

Now, I have a vague idea of what happens in these committees and all I can find on its last happening is this:

Jul 28, 2005: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.

So who killed the Federal Housing Enterprise Regulatory Reform Act of 2005?
Was it the Democratic minority? Was it the Republican majority? Was it a majority of bipartisan? Was it a few members of one party joining the other to kill it? Who has information on this?

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005 (GovTrack.us)
Senate Committee on Banking, Housing, and Urban Affairs - Congresspedia
 
Obvious Child,

Not every reported bill ever makes it to the floor of the Congress. At the time the bill was reported, Congress was likely approaching its summer recess. Afterward, its attention was devoted to appropriations measures. Beyond that, an increasing amount of time in Congress was devoted to what was then a deteriorating situation in Iraq.

On a side note, I would be curious to know why Senator McCain did not co-sponsor the bill when it was reintroduced in 2007 (S.1100). What did he see differently two years later?
 
Why is this thread under US Elections???
 
Not every reported bill ever makes it to the floor of the Congress. At the time the bill was reported, Congress was likely approaching its summer recess. Afterward, its attention was devoted to appropriations measures. Beyond that, an increasing amount of time in Congress was devoted to what was then a deteriorating situation in Iraq.

I fully realize this. I'd just like more information especially since people like Bhkad and Aquapub are casting it as the GOP's attempt to prevent the whole credit crisis. I'm not surprised this got very little attention.

On a side note, I would be curious to know why Senator McCain did not co-sponsor the bill when it was reintroduced in 2007 (S.1100). What did he see differently two years later?

Indeed. That is interesting.
 
It's hard to say, but it doesn't look good for the dems.

Here's an article in the NYTimes from 2003 about the proposed legislation, including a couple of democratic congressmen's objections to it.

Then, in 2006, McCain made this statement in support of the legislation.

The bill was favorably supported by the (at the time) republican-led Senate Banking Committee, but never made it to the floor for a vote.

I haven't found any official record of the bill's opposition, but reports suggest that it was considered a partisan issue. I have no idea why McCain didn't co-sponsor 2007's follow-up, maybe because it already had 3 co-sponsors, but the now democrat-led banking committee (chaired, interestingly, by alleged "friend of Angelo" Chris Dodd) has yet to review it.

Seriously, tho...McCain would be a fool not to jump on this.
 
The Federal Housing Enterprise Regulatory Reform Act of 2005 is currently being cited as McCain's attempt to stop the current crisis and its death was at the hands of the democrats.

There's a couple things potentially wrong with that. First of all, McCain was merely a co-sponsor. Hagel was the primary backer of the bill. Second, the bill went to the Senate Committee on Banking, Housing, and Urban Affairs in 2005. That would be the 109th Congress. At the time, the Senate Committee on Banking, Housing, and Urban Affairs was controlled by the GOP. Richard Shelby (Alabama R) was the chairman and Paul S. Sarbanes was the ranking member. You may remember him from the Sarbanes-Oxley act. The GOP had a two person majority over the Democrats.

Now, I have a vague idea of what happens in these committees and all I can find on its last happening is this:

Jul 28, 2005: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.

So who killed the Federal Housing Enterprise Regulatory Reform Act of 2005?
Was it the Democratic minority? Was it the Republican majority? Was it a majority of bipartisan? Was it a few members of one party joining the other to kill it? Who has information on this?

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005 (GovTrack.us)
Senate Committee on Banking, Housing, and Urban Affairs - Congresspedia


This article by the American Economic Instute may shed some light on why the bill never made it to the floor. This article is about the House version of the bill. (Coincidentally, this is the same organization that Kevin Hassert, McCain's advisor and one of the persons citing the act as McCain's supposed attempt to avert the current financial situation, belongs to.)

http://www.aei.org/publications/pubID.22705/pub_detail.asp

According to the Daily Kos, McCain was not an original sponsor of the bill but signed on as one in May 2006 after it was reported that the federal board overseeing Fannie Mae ripped them for shoddy accounting practices. Nothing else happened after McCain signed on.

Daily Kos: State of the Nation

I recognize the Daily Kos is knows as a left leaning outlet, maybe someone can demonstrate their article is incorrect.
 
Last edited:
Daily Kos: State of the Nation

I recognize the Daily Kos is knows as a left leaning outlet, maybe someone can demonstrate their article is incorrect.
That's good stuff, thanks.

Found one error, however:
Daily Koz post said:
S190 was discussed in the Senate Banking Committee on July 28, 2005 with the result, "Ordered to be reported with an amendment in the nature of a substitute favorably", which I believe is Congress speak for, "we don't like this, please go rewrite it and we may reconsider", i.e., the bill died in a Republican controlled committee and never came to the floor of the Senate or back to the Senate Banking Committee for reconsideration. S190 died in committee.
"Ordered to be reported with an amendment in the nature of a substitute favorably" does not mean "we don't like this, please go rewrite it and we may reconsider".

It means, at least according to this, that the committee has re-written the amendment and is in favor of the new version being reported to congress.

Since that's where the bill was left when it died (at the end of the 109th congress), I assume it was never reported. It certainly was never voted on. I don't know that the record exists as to why, but the word on the street (and certainly from McCain's campaign people) is that the democrats "killed" it.
 
This article by the American Economic Instute may shed some light on why the bill never made it to the floor. This article is about the House version of the bill. (Coincidentally, this is the same organization that Kevin Hassert, McCain's advisor and one of the persons citing the act as McCain's supposed attempt to avert the current financial situation, belongs to.)

http://www.aei.org/publications/pubID.22705/pub_detail.asp
This is interesting. The author of this article is a talking head in this video, which is where I first heard of the whole thing. In the video, he says that this legislation "would have prevented Fannie & Freddie from acquiring these bad mortgages. it actually gave a new regulator for Fannie & Freddie the kinds of powers that a bank regulator has."

Reading this article (and watching how the video is edited) makes me wonder if Fox News is misquoting him.
 
That's good stuff, thanks.

Found one error, however:
"Ordered to be reported with an amendment in the nature of a substitute favorably" does not mean "we don't like this, please go rewrite it and we may reconsider".

It means, at least according to this, that the committee has re-written the amendment and is in favor of the new version being reported to congress.

Since that's where the bill was left when it died (at the end of the 109th congress), I assume it was never reported. It certainly was never voted on. I don't know that the record exists as to why, but the word on the street (and certainly from McCain's campaign people) is that the democrats "killed" it.

I'm not at all that the word on the street from the Republicans is that the Democrats killed it as they are trying to pass this off as the regulatory salvation (which, given the Republicans' abhorrence of regulation, ought to raise a red flag right there) for from the financial situation and its the Democrats fault it didn't pass.

Putting aside the that the bill actually deregulated Fannie more than provide an effective oversight, my point is the dubious proposition that Democrats could have killed a bill in a committee controlled by a Republican majority.
 
This is interesting. The author of this article is a talking head in this video, which is where I first heard of the whole thing. In the video, he says that this legislation "would have prevented Fannie & Freddie from acquiring these bad mortgages. it actually gave a new regulator for Fannie & Freddie the kinds of powers that a bank regulator has."

Reading this article (and watching how the video is edited) makes me wonder if Fox News is misquoting him.


Good catch. Wallis seems to be saying in the video that the same legislation he calls a "world class failure" in his article would have effectively regulated Fannie Mae to prevent the current situation. He he has changed his tune 180 degrees, for as you speculate, Fox did a distortion. I'd put my money on the latter.

I still don't understand how the Dems could have blocked this legislation in a committee where the Republicans had an 11-9 seat advantage.

If, as Fox reports all the Republicans voted for it and all the Dems against, it would have made it thru committee.

The fish wrapper stinks here.
 
Okay, found more stuff. Sorry...not good news for the dems.

Good catch. Wallis seems to be saying in the video that the same legislation he calls a "world class failure" in his article would have effectively regulated Fannie Mae to prevent the current situation.
Turns out the differences between s190 and hr1461 are more significant than we thought. Here's another Wallison article specifically about s190. A little quote to whet your appetite:

Although the House committee whiffed, the Senate Banking Committee connected, adopting a bill (S 190) that actually contained tougher language on portfolios than what the administration had proposed. Now, Senate action is pending on a bill that would truly reform GSE regulation; undoubtedly--from the perspectives of Fannie and Freddie--things have gotten very serious indeed.

Limiting the GSE portfolios is serious business for the taxpayers and the economy, as well as for the GSEs. The taxpayers and the economy will benefit because they will be relieved of the risk of a GSE default, with a resulting taxpayer bailout and possible systemic effects. For the GSEs, however, the result will be a sharp reduction in profitability--perhaps as much as an 85 percent decline--as they are compelled to carry out their mission through the less risky technique of securitization and the issuance of mortgage-backed securities (MBS).​


I still don't understand how the Dems could have blocked this legislation in a committee where the Republicans had an 11-9 seat advantage.
It is hard to understand for us, but I think it's more clear to people who are familiar how things go down in congress. All one side has to do to "win" is prevent the measure in question from being voted on, and they've been perfecting that skill for two centuries: filibusters, appealing to committees, etc.

You get a tiny taste of it, relating to this bill specifically, in this interview, which is Wallison (again) with Jim Lockhart and Senator Chuck Hagel (who was the one who sponsored s.190), from 2006. Here's a quote (this is Hagel talking):

I think there is an issue that we are not focusing on and should focus on more as we talk about reforming the GSEs, but in particular in S-190, is giving the regulator far more authority and far more latitude to do the things that we call upon our regulators to do and have confidence that they will do it. You know the litany of, I believe the excesses of the GSEs, Fannie and Freddie, last year’s lobbying at over $23 million and running television ads challenging the Congress when we were marking up my first bill – which I just found astounding.

We chartered these institutions and I wake up in the morning and I’m being personally, those of us who question Fannie or Freddie, we are being vilified that we’re going to undo the entire housing market in this country. If you remember one of those commercials, there was an African-American couple sitting at their breakfast table, having breakfast, saying that they’re going to lose their house and all possibility of having any resources and money to go out and borrow money to have a future and their children would have no future because the Congress wants to do away with that liquidity that has hereto been available to low-income individuals. Just outrageous, completely outrageous. And I said so.

I remember when I said those things and I commented at the markup, and some of you may have been there, that my comments, as inarticulate as they may have been, and as I am, were greeted with almost guffaws by many of my colleagues.​


If, as Fox reports all the Republicans voted for it and all the Dems against, it would have made it thru committee.
It's a slightly misleading quote, as it was never voted on on the floor. I can only assume that's how the vote went in the Banking Committee, and it passed. That's where the word "favorably" comes from in "Ordered to be reported with an amendment in the nature of a substitute favorably".

From what I understand, once a bill goes to committee it's pretty much guaranteed to die. Even if it makes it out of committee, as this one did, it just sits on the shelf until the term ends and dies. Cut to 2007 when the bill was re-introduced as s.1100 (this is the current congressional session). It was, again, sent to committee, but this time the dems run the Banking Committee, and they haven't even looked at it yet. Not that it would matter at this point.

So, still no "proof", no smoking gun that the bill was "blocked by the democrats", but it doesn't look good. What it looks like is some people had some very serious (and legitimate) concerns about F&F (McCain among them), but a lot of people in congress just drank the Kool-Aid that they were doing what they were supposed to be doing: helping underprivileged families get in to homes (easy Kool-Aid to drink, as it came with $23 million a year in lobbying dollars).
 
Paydirt

...the gun may not be smoking, but it's still pretty warm.

Facing Facts on Fannie and Freddie, by Peter Wallison of course. A sample:


In the year since it was passed by the Senate Banking Committee, legislation to reform the regulation of Fannie Mae and Freddie Mac has languished in the Senate.

The problem, we’re told, is that Senate Democrats do not like the provision of the bill that would severely restrict Fannie and Freddie's accumulation of portfolios of mortgages and mortgage-backed securities.

These portfolios now amount to almost $1.5 trillion and are carried with debt almost equal to that amount, requiring Fannie and Freddie to assume enormous interest rate risk. Those who favor restrictions on the size of the portfolios argue that this risk, if not well managed, could adversely affect the financial condition of one or both of these organizations, with a resulting big hit to the economy and an enormous taxpayer bailout.

Instead, proponents of portfolio limitations note that Fannie and Freddie can carry out all their secondary-market activities simply by creating and issuing mortgage-backed securities, a process that does not require them to take interest rate risk.

Until recently, the Democrats on the Banking Committee had never made clear why they opposed restrictions on the size of the portfolios. But now, in a recent statement of "Additional Views," they have finally declared their reasons for holding up the committee bill.

The Democratic senators reported, "The retained portfolios of Fannie Mae and Freddie Mac help keep interest rates low; they have helped markets function effectively, even when other sectors experienced severe credit crunch problems; and they attract funds from all over the world to be invested in the U.S. mortgage markets." Perhaps not surprisingly, this is exactly what Fannie and Freddie have been saying in their intensive lobbying campaign to fight restrictions on their highly profitable mortgage portfolios.

Trouble is, none of it's true. In a paper posted this week on the Federal Reserve Board's Web site, and in a slide presentation used at a conference at the Chicago Federal Reserve Bank in May, three Fed economists demolished the first two of these reasons; the third was demolished a year ago.​


Ouch.
 
So what do you make of this:

Oxley hits back at ideologues

In the aftermath of the US Treasury's decision to seize control of Fannie Mae and Freddie Mac, critics have hit at lax oversight of the mortgage companies.

The dominant theme has been that Congress let the two government-sponsored enterprises morph into a creature that eventually threatened the US financial system. Mike Oxley will have none of it.

Instead, the Ohio Republican who headed the House financial services committee until his retirement after mid-term elections last year, blames the mess on ideologues within the White House as well as Alan Greenspan, former chairman of the Federal Reserve.

The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley, now vice-chairman of Nasdaq.

He fumes about the criticism of his House colleagues. "All the handwringing and bedwetting is going on without remembering how the House stepped up on this," he says. "What did we get from the White House? We got a one-finger salute."

The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.

Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.

Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.

"We missed a golden opportunity that would have avoided a lot of the problems we're facing now, if we hadn't had such a firm ideological position at the White House and the Treasury and the Fed," Mr Oxley says.

When Hank Paulson joined the administration as Treasury secretary in 2006 he sent emissaries to Capitol Hill to explore the possibility of reaching a compromise, but to no avail.
 
So what do you make of this:
Interesting. Particularly these:

Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill.
This is the first I've heard about the White House providing any sort of blockage.


...the legislation lacked a champion in the Senate and faced hostility from the Bush administration. ... Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.
He did, however it's become clear that the Senate bill would have been much stronger (and effective) legislation than the house bill (see articles linked above). As for lacking a champion...the Senate bill was introduced by Sen. Charles Hagel, who seems to be a skilled economist, but describes himself (above) as "inarticulate"...probably not the champion the bill needed.


Actually, I think this whole question can now be shelved as a campaign issue based on the candidates' debate on Friday night. Transcripts don't seem to be live yet but it was something to the effect of:

Obama: I warned congress two years ago that this could happen.

McCain: I also warned congress two years ago. We all saw this coming.​

If McCain really saw himself as the lone champion of the saving legislation that was blocked solely by those darn democrats, I'm sure we would have heard about it...the very idea is probably nothing more than Rovian hyperbole.

We can probably chalk it up to a bipartisan failure...however the situation never would have been created in the first place without the republican's passion for deregulating everything.
 
The democrats watered down the bill to the point of being useless as a tool for the republicans to keep the democrats from destroying our economy like it has.
 
The democrats watered down the bill to the point of being useless as a tool for the republicans to keep the democrats from destroying our economy like it has.

:lol:

You're just full of excuses, aren't you? Now tell us how the nasty old dems prevented anything in 2005? The GOP had all 3 branches.
 
:lol:

You're just full of excuses, aren't you? Now tell us how the nasty old dems prevented anything in 2005? The GOP had all 3 branches.

Maybe if you knew how our senate works you wouldn't need to ask that question.

Why hasn't our democratic controlled congress gotten us out of Iraq like they promised? Obviously the majority party does not have all the power. Otherwise the minority wouldn't even bother to show up for work.
 
Maybe if you knew how our senate works you wouldn't need to ask that question.

Why hasn't our democratic controlled congress gotten us out of Iraq like they promised? Obviously the majority party does not have all the power. Otherwise the minority wouldn't even bother to show up for work.

Because Bush would veto it before it even touched his desk.

Was that deliberate how you just illustrated you don't know how things work immediately after accusing someone else of it? :rofl
 
I'm just passing on data from my research related to this matter :

Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005
George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005

Statement of Administration Policy: H.R. 1427 - Federal Housing Finance Reform Act of 2007
George W. Bush: Statement of Administration Policy: H.R. 1427 - Federal Housing Finance Reform Act of 2007

I'm just passing on data from my research related to this matter : :doh

Bush Profiteering from Housing Defaults by James Bovard

Homeownership Push Is Rethought - WSJ.com

Fact Sheet: President Bush Calls for Expanding Opportunities to Homeownership

President Reiterates Goal on Homeownership
 
Because Bush would veto it before it even touched his desk.

Was that deliberate how you just illustrated you don't know how things work immediately after accusing someone else of it? :rofl

That's hysterical that you all voted for these politicians who promised to pull the troops out of Iraq when they knew they couldn't. :rofl

Of course congress could have overridden a Bush veto.

The democrats destroyed any chance of this bill going through or any chance that Bush would even sign such a weakened bill.

Nice job, dems, can't wait to see what you communists do with Pelosi and Reed and Obama. In two years you've managed to ring up more debt than Bush did in 6 years with the republicans.
 
That's hysterical that you all voted for these politicians who promised to pull the troops out of Iraq when they knew they couldn't. :rofl:

single issue voting is more of a republican forte :D

sazerac said:
Of course congress could have overridden a Bush veto.

There aren't even enough partisan votes to block a filibuster (3/5 majority), and you think enough Republican votes could get pulled over to get a 2/3 majority in both the House and Senate?


We are on a tangent here , although the bill in question here did pass the house. it died in committee in the senate, a committee with a Republican majority (9 Dem, 11 Rep).
 
single issue voting is more of a republican forte :D

We are on a tangent here , although the bill in question here did pass the house. it died in committee in the senate, a committee with a Republican majority (9 Dem, 11 Rep).
It was not possible for any bill to pass that senate without 60 votes. Given that there wasn't a single democrat unwilling to sell his country down the drain there was no possibility of the bill's passage.

The republicans threw their hands up in the air and wept for our country. :(
 
Wow, I have read through this entire thread, trying to research intelligent discussion of the current crisis. I thought I had finally found a civilized forum where such things are discussed. Then comes sazerac, leaving nothing but ruin in his wake.

How depressing. Really, what is the matter with you?'

This thread was extremely informative. I had to register just to let you know that you aren't helping the world... at all.
 
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