WASHINGTON — The presidential contest has always carried large implications for the financial services industry, but Sunday's government takeover of Fannie Mae and Freddie Mac makes the race even more crucial.

In announcing the takeover, Treasury Secretary Henry Paulson made clear that the next administration would write a new charter for the government-sponsored enterprises. But the two candidates are likely to take opposite tacks if they win the White House. Sen. John McCain is more likely to favor privatizing them, and Sen. Barack Obama, perhaps not going so far as to nationalize them, is more likely to back closer ties between the companies and the government.

Sen. McCain thinks Fannie and Freddie "should be downsized, so they are no longer a threat to financial markets, and then removed completely from the implicit or explicit taxpayer backing," said Douglas Holtz-Eakin, a senior policy adviser to the Arizona Republican's campaign. "If the private sector has no appetite for them, they should simply go away."

Sen. Obama is also committed to revamping the GSE model, an advisor said, but is not wedded to a particular approach.

"Barack Obama has said very clearly that the current model of privatized gain and socialized risk is untenable, and would like us to move towards reforming that model," said Jason Furman, the Obama campaign's economic policy director. "Any solution needs to be mindful of the fact that the GSEs serve a complex mixture of public and private purposes, and any solution cannot rely on simplistic ideology, but instead needs to carefully and deliberatively figure out how to separate these different functions."

Still, observers said an Obama administration is likely to attempt to strengthen government ties to the GSEs.

"An Obama administration would be trying to resuscitate the GSEs, whereas a McCain administration would be focused on trying to take them apart," said Bert Ely, an independent consultant in Alexandria, Va.

No matter who wins in November, the new administration will have to work with a Democratic Congress that has historically protected Fannie and Freddie.

Observers said that Sen. Obama would likely work with House Financial Services Committee Chairman Barney Frank, D-Mass., and Senate Banking Committee Chairman Chris Dodd, D-Conn., and that the three are likely to be philosophically aligned on how to approach the GSEs. That is expected to result in less back and forth between Congress and the White House and may produce a structure with closer government ties to the GSEs.

Lawrence Summers, a former Treasury Secretary under President Clinton and an economic adviser to Sen. Obama, said the Illinois Democrat would be careful and deliberate in any analysis and is unlikely to view the matter through a partisan lens.

"I would not expect them to fall back on ideological mantra in addressing these issues," Mr. Summers said. "I think it would be far premature to predict precisely what division of responsibility between the public and the private sector would emerge from what would undoubtedly have to be a very long process of reflection."

He acknowledged, however, that there would likely be a push to move "beyond the current approach, where losses are socialized and gains are privatized."

Observers say Sen. McCain is likely to find less common ground with congressional Democrats but would wield some very powerful weapons.

"If McCain wins, he would have a lot of cards to play," a source said. "He owns the regulator. He owns the Treasury. He will have the Fed by his side."

Though Congress would write any new legislation, Sen. McCain would effectively control the GSEs if he became the president. He could decide to dramatically shrink them while they are in the government's care. Such a move would not need congressional approval.

The result could be a long and bitter argument between a McCain administration and a Democratic Congress — one with the future of the mortgage industry hanging in the balance.

Congressional Republicans were beginning the calls Monday to shrink the GSEs and privatize them. "If we can shrink them some, make them viable, and spin them off to private forces … we'll be a lot better off, in my judgment," said Sen. Richard Shelby, the top Republican on the Senate Banking Committee.

But the Alabama Republican acknowledged that Democrats see it differently. "There are going to be a lot of people on Capitol Hill that see nothing wrong with the government running this forever in perpetuity — I do," he said.

Both privatization and nationalization have been discussed at great length in recent months and have pros and cons. If Fannie and Freddie were privatized, they would lose their ability to do business more cheaply than their private counterparts and pass the savings on to consumers. That would make them less active in the mortgage market — a good thing, according to GSE critics — but it would also make the housing sector more reliant on banks, which have not shown a willingness to ramp up lending.

"Nothing can be done until the private sector can take over their role," said Peter Wallison, a fellow at the American Enterprise Institute who worked in the Treasury during the Reagan administration.

But Camden Fine, the president of the Independent Community Bankers of America, said that prospect does not thrill community bankers.

"One of the advantages of having Fannie Mae and Freddie Mac to community banks has been that there has been an impartial purchaser of mortgages on the secondary market," he said. "If there is no longer an impartial purchaser of mortgages on the secondary market, that forces community banks to sell their mortgages to competitors. That puts a community bank at a severe disadvantage to compete in their market if they don't have a secondary market."

Nationalization would maintain a federal commitment to housing and providing low-cost mortgages through a secondary market, but it also would keep the government in the mortgage business.

"Where would they start, and where would they stop?" asked Jerry Howard, the president of the National Association of Home Builders. "Does it become part of the government bureaucracy?"

Some observers said other options mixing elements of privatization and nationalization are possible. Karen Shaw Petrou, the managing director of Federal Financial Analytics Inc., said the government might try to treat Fannie and Freddie in much the same way as power companies.

Electric companies are "owned by shareholders but subject to extensive price and related regulation," she said. "That's a totally functional model that the country has been using for 100 years."

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