House leaders are stripping out some the traditional political structures in the House Banking Committee and Fannie Mae is pulling out all stops to ensure that lawmakers keep it under that umbrella and far away from the soon-to-be-formed empowerment committee. Mortgage Marketplace has learned that Fannie has recruited some of the most well-respected, influential hired guns in Washington to ensure its government-sponsored enterprise interests stay within the jurisdiction the House Banking Committee including former Bush administration Chief of Staff Ken Duberstein and his lobbying firm, the Duberstein Group.
Larry OBrien and Nick Calio, who both handled government affairs with the Bush administration, have also taken part in Fannies lobbying full-court press. They have also reportedly been joined by Mike Burman, who worked alongside Fannie Chairman Jim Johnson on Vice President Walter Mondales staff during the Carter years. Fannie officials were unavailable to confirm that the Duberstein Group is handling its lobbying efforts. Freddie Macs lobbying team, however, remains something of a mystery. Industry sources said Freddies concerns are identical to Fannies and believe the McLean, Va.- based GSE is lobbying equally hard.
Both GSEs have a lot at stake in the effort and want desperately to stay within the Banking Committees jurisdiction where they have friends, said one banking industry lobbyist. Getting moved to the empowerment committee would be like being sent to a leper colony for them they'll have to worry about being treated less favorably and they're scared to death they will lose the competitive advantage they now enjoy. They don't want to be anywhere near that committee. The concerns being spawned by the shake-up in Congress aren't limited to the GSEs. Most banking industry trade groups are waiting for the dust to settle before deciding which direction to take their lobbying efforts in 1995.
It looks pretty likely that [the Republican leadership] will strip public housing interests from the Banking Committee and put them in the new empowerment committee, said Larrick Blanchard, an outgoing staffer on the House Banking Committee, and they'll probably keep housing finance issues and add jurisdiction over securities to the Banking Committee agenda.
People have talked about dividing responsibilities, but nothing has been resolved yet, said Jay Harris, a lobbyist with the Savings & Community Bankers of America, adding that committee makeups would be resolved in about a week. But anything is possible. That notion is shared by many housing lobbyists. But what might be more certain is that changes are definitely ahead for the housing industry, and as the likely first target HUD will have to step up its own lobbying to protect many programs. The bond market is carefully watching as some of HUDs Section 8 housing subsidy programs have already been suggested as possible cuts. And any hopes of an FHA loan limit increase now seem dead. HUDs foundation is cracking and [its agenda] will be split as a result of the election, said Mike Ferrell, a legislative counsel with the Mortgage Bankers Association. Most of HUDs [agenda] will be jettisoned and placed in receivership.
How much will the new House leadership force HUD to change its way of doing business? Probably a lot. It certainly changes the rules of the game, Ferrell said. They [HUD] will become the hunted. Whether [their agenda] will be killed or just wounded remains to be seen it depends on the hunters. For power brokers in Washington, the rules are also changing quickly. A no-proxy vote is near in the House and passage could force members to be in attendance during all committee meetings. Because most lawmakers share time in two or more committees, partial absence has been fairly routine.
However, the new rules attendance requirement may force them to limit their assignments to just one or two committees, rather than four or five. The makeup of the two committees may also compel others to leave. The public policy housing programs under the empowerment committee are higher-profile assignments and some Democrats may follow the sound bites. Others may believe their votes are more important in that committee.
As a result, You may see many liberal Banking Committee members bolting to the empowerment committee for political reasons, Ferrell said.
Some possible defectors are: Barney Frank, D-Mass., Kweisi Mfume, D-Md., Maxine Waters, D-Calif., Joe Kennedy, D-Mass., and Floyd Flake, D-N.Y. who have all been staunch housing advocates. But former Banking Committee Chairman Henry Gonzalez, D-Texas, isn't likely to follow them. And while still influential, his power will be drastically reduced.
