22 September 2008

John McCain's 2005 "Warning" About Fannie, Freddie & Dems "Blocking" Regulation

A bit late passing this along, but John McCain's claim that he issued a warning against the excesses of Fannie Mae and Freddie Mac during the 2005-06 legislative year was given a "barely true" by Politifact. On 25 May, 2006, Senator McCain signed on as a co-sponsor to Chuck Hagel's effort to overhaul Fannie Mae and Freddie Mac (which Senator Hagel intoduced in January, 2005) following the publication of "a 340-page report from the Office of Federal Housing Enterprise Oversight."* However, as Politifact points out,
his attempts to depict those efforts as some sort of early warning that could have lessened the current credit crisis just don't wash. All McCain was talking about then was the potential fallout of accounting troubles in Fannie Mae and Freddie Mac. He didn't say anything about a freewheeling climate among creditors that had major financial institutions becoming badly leveraged on bad loans.
Additionally, those rumors that Democrats alone blocked GOP proposal, S.190, to regulate Fannie Mae and Freddie Mac? Questionable claims, for the bill never got out of committee:
Last Action [July 28, 2005]: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: Dead
So the bill was never brought to a full Senate vote. Recall that the Republicans were the majority in 2005-06, and the Committee on Banking, Housing, and Urban Affairs consisted of 11 Republicans and 9 Democrats (for a full listing of the members of the 2005-06 Committee on Banking, Housing, and Urban Affairs, see this entry at Sourcewatch). In other words, the proposal could have been voted out of committee and brought to the Senate floor had the GOP members had supported it.

* Notably, Senator Hagel reintroduced S.190 in 2007 as S.1110: Senator McCain has not publicly supported the "Federal Housing Enterprise Regulatory Reform Act of 2007," which remains pending.

Added: Rand Koler at the Seattle PI offer this breakdown, which suggests that Senator McCain announced his support for the bill only after it had, for all intents and purposes, already died in committee.

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