WASHINGTON -- Aida Alvarez, the new regulator of Fannie and Freddie, may have learned last week that she needs to be bipartisan in her political courting.

Ms. Alvarez, director of the newly created Office of Federal Housing Enterprise Oversight, lobbied hard in recent weeks for a $10.7 million budget that would double her staff to 60 people, from original estimates of 30. Ms. Alvarez told lawmakers that she needed the larger staff to be a serious regulator of the two secondary-market behemoths.

Late last week, the Senate Appropriations Committee went along with Ms. Alvarez and approved the budget she requested.

But two key Republican senators Ms. Alvarez had neglected to lobby raised concerns that could change the Outcome.

Christopher S. Bond of Missouri and Alfonse M. D'Amato of New York said they were worried the larger budget would build an over-sized bureaucracy. They want to maintain the budget at the $5.7 million approved earlier by the House, a Republican staffer said.

Senator D'Amato may offer an amendment on the floor of the Senate to trim the excess $5 million, the staffer said.

Though the regulator's office is ultimately funded through fees paid by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corp., the appropriations committees of the House and Senate must approve the budget and advance the funds.

To get the larger budget, the full Senate must vote for it and the House must agree.

It's that House-Senate conference that the Republican lawmakers appear to be eyeing.

Even if an amendment to trim the budget does not pass the Senate, it may find favor in the House-Senate conference.

|It Isn't a Done Deal'

"There are a number of members of both parties who would be concerned about doubling the budget. It isn't a done deal," one Republican staffer said.

On Monday, Ms. Alvarez tried to mend fences in a meeting with Republican staff from the Senate Banking Committee. Sen. Bond and Sen. D'Amato sit on that committee, and Ms. Alvarez reports to it as well.

Miss Alvarez described the meeting as "very productive."

Sen. Bond's staffers said the meeting "went well."

Wants to Avoid |Micromanaging'

"I don't think we've come to any final resolution. We have to make sure they have adequate staffing to do the job right. We don't want it to be a bureaucracy micromanaging Fannie Mae and Freddie Mac," one staffer said.

Ms. Alvarez said she would provide the Republican staff with more information on the structure of her office.

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