The agency that regulates Fannie Mae and Freddie Mac will get a mere $1 million increase in its budget for fiscal year 2006 after receiving a 50% budget increase last year.The President's FY 2006 budget proposal would increase funding for the Office of Federal Housing Enterprise Oversight to $60 million from $59.2 million. However, the Bush administration expects that Congress will pass legislation this year that transfers OFHEO to a new agency with stronger regulatory and oversight powers. "It is expected that all resources available to OFHEO would be transferred to a new strengthened housing GSE regulator that will be proposed in 2005," a budget document says. The administration also reaffirmed its support for giving the new government-sponsored enterprise regulator the authority to levy assessments directly on Fannie and Freddie to fund its operations, instead of going through Congress and the appropriations process.

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