Democrats Fight For Fannie, FreddieHousing Fund

WASHINGTON - (07/28/05) -- A group of Democratic senators planto submit a substitute proposal that would require Fannie Mae andFreddie Mac to set aside billions of dollars to create anaffordable housing fund when the Senate Banking Committee beginsdebating a secondary market reform bill Thursday. The provision,which has little chance of passing the Republican-controlled Senatecommittee, is symptomatic of the broad disagreement that exists onthe reform bill, which has pitted some of the most powerfullobbying groups against one another. The Democrats will proposethat the Senate bill, like one that passed the House FinancialServices Committee earlier this year, includes a provisionrequiring the secondary market giants to set aside a portion oftheir annual profits, just as the Federal Home Loan Banks arerequired to do, to fund affordable housing projects. The fund isprojected to have as much as $3 billion in it after the first fewyears. But the measure is widely opposed by Republicans, who see itas another tax on the two government sponsored enterprises, so theRepublican leaders of the banking committee have not included it intheir version of the bill.