To break a Congressional deadlock and fund the payroll tax break, Sen. Bob Casey, D-Penn., is proposing an increase in the guarantee fees charged by Fannie Mae and Freddie Mac.
The GSE regulator would determine the amount of the guarantee fee increase under the Casey bill.
"But such an amount shall not be less than an average of 12.5 basis points for each origination year or book year above the fee imposed in 2011 for such guarantees. These reforms will raise $38.1 billion [over 10 years]," according to a press statement issued by Sen. Casey Monday afternoon.
A recent Federal Housing Finance Agency study found that Fannie and Freddie's 10 largest seller/servicers paid an average g-fee of 23 basis points in 2010. Smaller lenders, on average, paid 27 basis points.
The new g-fee proposal was discussed by members of the Super Committee who recently failed to reach an agreement on a $1.2 trillion plan to reduce the federal budget deficit. Sen. Casey's bill also includes other revenue raising proposals.
House and Senate lawmakers are looking for ways to fund the payroll tax holiday that expires Dec. 31. Unless they can reach a compromise, the average middle class household will see their taxes rise by $1,000 in 2012.
"The legislation is fully paid for and includes measures that have received bi-partisan support in the past," Sen. Casey said.
