WASHINGTON — President Obama's final budget faces an uphill battle with Congress, with House and Senate Republicans alike already saying they won't hold hearings to review the plan.

But the proposal does shed light on the administration's plans for housing finance reform, how it views cybersecurity progress and a proposed tax on bank liabilities that could become a reality if a Democrat takes the White House in November.

Following are some highlights and the reaction:

Banks largely shrugged off the budget's $19 billion in funding to improve cybersecurity, which is a 35% increase from the previous year.

Still, some praised the administration's renewed commitment to promote multifactor authentication and move beyond just the use of a password.

"Anything that enhances the authentication measures external from financial services also enhances our ability to protect our customer" from fraud or identity theft, said Doug Johnson, senior vice president and chief policy adviser on cybersecurity at the American Bankers Association.

GSE Reform
Enacting housing finance reform is likely out of the question in Obama's final year, but the budget pledged to continue to work on the issue. Once again, it alluded to the plan pushed by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., that would have wound down Fannie Mae and Freddie Mac, replacing them with a mostly privatized system with a government guarantee in the case of catastrophic losses.

"The bipartisan progress in the Senate in the previous session was a meaningful step towards securing a system that aligns with many of the administration's principles for reform, including ensuring that private capital is at the center of the housing finance system so that taxpayer assistance is never again required," the budget said.

The budget firmly reiterated that "Fannie Mae and Freddie Mac should be wound down," which would be a blow to hedge funds and other groups that have purchased the government-sponsored enterprises' stock in the hope they will be recapitalized.

"This statement … likely dumps more cold water on the idea that the Obama administration would voluntarily repeal the dividend sweep" which prevents the GSEs from building capital reserves by requiring them to transfer their profits to the Treasury Department, said Jaret Seiberg, a managing director and policy analyst at Guggenheim Securities.

As part of the agreement, Fannie and Freddie have generated more than $240 billion for the government. The administration said the sweep agreement will continue until 2018 unless legislation is passed.

The administration also said the Federal Housing Finance Agency will continue to develop a common securitization that platform that can be used by both Fannie and Freddie and non-GSE users.

Bank tax
Obama's budget again included a proposed 7-basis-point fee on liabilities for banks with more than $50 billion in assets. The budget proposal estimates that the fee would generate $111 billion over 10 years and that it aims to "reduce the incentive for large financial institutions to use excess leverage."

Bert Ely, a banking consultant in Alexandria, Va., said that "despite how much large banks are disliked, this leverage levy is a nonstarter."

However, Democratic presidential front-runner Hillary Clinton said she would implement a similar plan, with a risk fee on big banks that would scale up for firms that hold more debt and rely on short-term financing.

Seiberg at Guggenheim Securities said that, while the fee proposal will not advance this year, it "will be in the next budget in 2017 if a Democrat wins the White House."

Federal Housing Administration
Housing and Urban Development Secretary Julian Castro approved a 50-basis-point reduction in the FHA annual mortgage insurance premium last January and some suspected that the 2017 budget could call for a further reduction in premiums.

But the budget left premiums unchanged at 85 basis points.

The budget said that instead of lowering premiums, the FHA will continue on a "strong trajectory" of building up the mutual mortgage insurance fund to protect against losses despite collecting premiums on new mortgages "that are well above the estimated costs of guaranteeing those mortgages against default."

Making Home Affordable Programs
The Home Affordable Modification Program, which helps underwater borrowers modify their mortgage, and the Home Affordable Refinance Program, which enables borrowers to refinance to a lower mortgage rate, are set to expire at the end of 2016. Both programs were created in 2009 in the wake of the financial crisis and were part of the administration's response to the housing collapse. While both programs never quite lived up to their billing, HAMP helped more than 1 million borrowers modify their mortgage, while HARP was successful in allowing more than 3 million borrowers refinance to lower rates.

The budget does not propose to extend the programs further, raising questions about whether they will finally expire.

Lalita Clozel and Brian Collins contributed to this article.

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