CBO: GSE 'Subsidy' Over $15B

The federal government subsidizes Fannie Mae and Freddie Mac to the tune of more than $15 billion a year, according to a new analysis conducted by the Congressional Budget Office.In testimony before the Senate Banking Committee Thursday morning, CBO Director Douglas Holtz-Eakin released the estimate, noting that if the government wants to curb the growth of the two GSEs it could limit their portfolio investments or set statutory boundaries on their ability "to increase the value of the federal subsidy." When CBO has estimated the size of the subsidy in years past, both GSEs have attacked the agency's calculations and methodology. In his testimony, Mr. Holtz-Eakin also noted that Fannie and Freddie, combined, have outstanding securities of more than $4 trillion, or 57% of all residential housing debt in the United States.