Senate Makes Future Hikes in G-Fees More Difficult
The Senate has passed a budget resolution along with an amendment that requires a 60-vote minimum before Congress can tap Fannie Mae and Freddie Mac for additional guarantee fees to pay for other government programs.
By unanimous consent, the Senate approved the amendment late Friday night that allows any senator to raise a point of order and demand a 60-vote majority to pass a GSE guarantee-fee hike. All the members of the Senate Banking Committee joined in co-sponsoring the 60-vote amendment.
“As the Banking Committee continues to work to build consensus on housing finance reform, I am glad my Senate colleagues recognize the risks of using Fannie Mae and Freddie Mac as piggybanks to finance short-term spending,” said committee chairman Tim Johnson, S. D.
The new 60-vote threshold is important because the budget resolution actually gives Senate appropriators the option of extending a 10 basis point fee on Fannie and Freddie loans for two years.
Congress first approved the 10-bp guarantee fee hike in late 2011 to pay for a two-month extension of a payroll tax holiday. Fannie and Freddie implemented the g-fee hike in April 2012. All the revenues go to the U.S. government for 10 years.
The budget resolution passed last Friday night contains language extending the 10-bp g-fee through 2022 and 2023, which would generate $7.6 billion in revenue.
Any future bill hiking GSE g-fees will have to meet the 60-vote threshold to pass, according to Sen. Johnson.
Sen. Bob Corker, R-Tenn., contends this 60-vote requirement does not go far enough. Because the budget resolution is not binding on Congress, “the amendment will not have the force of law,” according to a press release issued by Sen. Corker’s office.
The Tennessee senator wants to pass a bill that would prohibit Congress from raising GSE guarantee fees to offset other government spending.
“Passing this bill will truly jumpstart GSE reform and pave the way for substantive and structural housing finance reform,” Sen. Corker said.
Sens. Mark Warner, D-Va., Elizabeth Warren, D-Mass., David Vitter, R-La., and Corker are co-sponsors of the “Jumpstart GSE Reform Act.”
“Sen. Corker will continue to push for a vote on the standalone bill, which would have the force of law,” the press release says.