No surprise here: Congress and the White House are squabbling over the budgetary consequences of the Fannie Mae and Freddie Mac receiverships. Congressional Budget Office director Peter R. Orszag wants the costs to show up on the ledger. White House Office of Management and Budget has a different idea. “After extensive consideration and discussion with the Department of Treasury and various stakeholders, I have decided to maintain the GSEs’ (Government Sponsored Enterprise) non-budgetary status,” OMB director Jim Nussle announced last week. But he’ll be monitoring everything closely.
In other GSE news, the Federal Housing Finance Agency won’t give ex-Fannie Mae head Daniel Mudd and former Freddie Mac chief Richard Styron those multi-million-dollar exit packages.
Meanwhile, two dozen or so community banks issued statements last week enumerating their exposure to Fannie and Freddie stock. So far, none of them expect any significant damage. But that’s only the beginning of the revelations; the road may get bumpier.