The incoming chairman of the U.S. House Financial Services Subcommittee has stated that reforming the government-sponsored enterprises (GSEs) will be a time-consuming endeavor that will not be measured by a be-all/end-all deadline.Â
In an interview with the Wall Street Journal, Rep. Scott Garrett, R-N.J., stated that speeding the demise of Fannie Mae and Freddie Mac would be impractical. ‘We recognize that some things can be done overnight and other things cannot be,’ he said. ‘You have to recognize what the impact would be on the fragile housing market as it stands right now.’
Garrett made it clear that he had ‘not established a specific time frame for winding them down,’ referring to the goal of removing Fannie Mae and Freddie Mac from their conservatorship status.
Garrett's decreased urgency to the subject appears to differ from a statement issued by his office when he received his chairmanship appointment on Dec. 9. At that time, he stressed that ‘while there will be a number of very important issues on the subcommittee's plate during the 112th Congress, winding down Fannie Mae and Freddie Mac will be priority number one.’ Â
However, Garrett's strategy was echoed by Rep. Randy Neugebauer, R-Texas, the incoming chairman of the House Oversight and Investigations Subcommittee. ‘We are not interested in pulling the plug immediately on Fannie and Freddie,’ said Neugebauer in an interview with the Christian Science Monitor. ‘We need a more measured approach that will faze them out over a period of time, given the impact on the markets.’
SOURCES: Wall Street Journal, Office of Rep. Scott Garrett, Christian Science Monitor