UPDATE: "Backdoor Bank Bailout?: Fannie Mae, Freddie Mac Bailout at $127 Billion, No End in Sight.- Freddie: "Can you spot me another 10?" (FNM; FRE)"
From the Wall Street Journal's Real Time Economics blog:
Republicans have complained for months that the Obama administration’s financial overhaul push doesn’t include any resolution to the government’s expensive conservatorship of Fannie Mae and Freddie Mac. Now, three Republicans plan to offer an amendment during the floor debate that would force Democrats to take a politically difficult vote on what to do with the companies.
Sens. John McCain (R., Ariz.), Richard Shelby (R., Ala.), and Judd Gregg (R., N.H.) plan to offer an amendment in the coming days that would force the government to end its conservatorship of Fannie Mae and Freddie Mac after a transition period and make the firms operate “without government subsidies” in the future.
Here’s how their amendment would work:
1) The conservatorships for both companies would end two years after the bill becomes law, though the government would be able to extend it for another six months if necessary.
2) Three years after the conservatorship ends, their government charter would expire. Then the companies would have 10 years to operate under a special holding company so that they can dissolve remaining mortgages or debt obligations they held as government-sponsored enterprises....MORE