May 06, 2010
In case you missed it, this morning the Wall Street Journal ran an editorial highlighting the work of Senators McCain, Shelby and Gregg to reform Fannie Mae and Freddie Mac.
In part, they write: The virtue of Mr. McCain's amendment is that it will give Senators a chance to vote on the kind of reform that Congress blocked for so long, notably with Senator Barack Obama helping the blockade.
The amendment mandates that the current government conservatorship of Fan and Fred will end within 30 months. In the meantime, the companies will have to reduce their mortgage portfolios by 10% each year. If the terrible twosome can't stand on their own after conservatorship, they would then go into receivership and be liquidated.
In short, the McCain amendment precisely targets the problems that caused the mortgage crisis: If the housing giants are no longer subsidized, they will become small enough to fail. That means they will stop lending money to people who cannot afford to pay them
back, and in turn they will stop endangering taxpayers.
This is a genuine anti-bailout vote, and you would think Democrats would be more than happy to go along given their claims that they want to stop bailouts. Yet Republicans aren't even sure that Majority Leader Harry Reid will allow a vote on the McCain measure lest Democrats get pressure from the White House to oppose it. They would then reveal that their reform is less about reducing risk than about giving the political class more control over the financial status quo.
You can read the complete editorial here. (WSJ Subscription Required
Click Below to see the Sen. McCain's Admendment:
McCainAmendment-SA 3839
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