The former Minnesota governor discussed the landscape for reform of Fannie Mae and Freddie Mac at a housing event in Washington hosted by the American Action Forum and the Progressive Policy Institute, saying he's hopeful that the pieces are moving in the right direction for change.
"Unlike most other large issues facing the country, facing the economy, this one can actually get addressed," said Pawlenty. "It can actually get teed up by the Congress and actually solved, I think, sometime in the next, let's say less than three years—but hopefully sooner than that."
Still, he acknowledged in response to an audience question that the odds are less likely before the congressional elections heat up in 2014, unless President Obama or top lawmakers indicate that housing legislation is a top priority, or if there is another "hiccup of a significant magnitude" in the housing sector.
"While this has been teed up in a few speeches, it hasn't really been elevated to the point of, this is a marquee issue for this quarter or for 2014. If the President chooses to elevate it from tier two to tier one rhetorically, that helps," he said. "Similarly, if Sen. Reid or the leadership in the Senate or the House did the same thing, that would help provide fuel."
But it's not clear right now that top policymakers have the appetite to bring the issue to the forefront of national attention anytime soon. Senate Majority Leader Harry Reid made waves over the summer when he voiced concern with plans to overhaul the government-sponsored enterprises during a local public radio interview. House Majority Leader Eric Cantor also failed to put housing reform on his agenda for the rest of this year, essentially ranking the issue below almost a dozen others.
The White House and Congress, meanwhile, are currently locked in a battle over the budget and will have to tackle the debate over the debt ceiling in a matter of weeks, all of which could continue to distract key players from a longstanding issue like housing finance reform.
Pawlenty nonetheless emphasized that the timing of legislation is not his top concern, because of the complexity and size of the task facing Congress.
"I'm not overly worried about how long it's taking, in the sense that this is a massive potential change with potentially massive consequences. So you want to measure twice and cut once," he said. "I'd be a little concerned if this group of policymakers rushed in and crammed a GSE reform bill through."
He added that much of the substantive policy work has been put forward, so it's a matter of reviewing the plans already out there.
"There isn't a grand mystery around what are the options—the options are all there. All of the think tanks, all of the groups, have done good work in flushing all that out," he said. "Now the question is, from that menu what can you put that together in the form of a final product?"