House to Investigate Fannie and Freddie Crisis

The Hill reported October 7 that House Oversight and Government Reform Committee Chairman Henry Waxman has announced that he will conduct investigative hearings into the Fannie Mae and Freddie Mac debacle.

One has to wonder if Chairman Waxman will call fellow Representative Barney Frank in front of the committee to testify about his role in this mess. Or maybe he'll call Senators Chris Dodd and Barack Obama, the number one and number two recipients of Fannie and Freddie donations, respectively. I won't hold my breath.

The Hill report mentions that Waxman made the decision to hold hearings in response to Republican pressure. If Republicans were the culprits at the root of the problem, it is doubtful they would have been pressuring Waxman for hearings on the subject.

The Hill quoted Republican Representative Tom Davis of Virginia as saying, "Everything you hear about why we had to spend $700 billion to bail out our economy comes back to Fannie and Freddie in one way or another." The Hill notes that Fannie and Freddie "...are perceived as having more ties to Democrats than other large, purely private corporations."

"They [Fannie Mae and Freddie Mac] seem to be at the epicenter of the crisis," The Hill quotes Davis as saying, "and yet the chairman continues to focus on issues, such as executive compensation, that generate headlines but neither get to the root of the problem nor move us any closer to a solution." Davis added, "We'd hate to think the millions of dollars Fannie and Freddie executives contributed to Democratic congressional candidates also contributed to the reluctance to investigate this aspect of the crisis."

There has been a lot of finger pointing about the Fannie Mae Freddie Mac debacle, from both sides of the aisle. Fox News host Bill O'Reilly of The O'Reilly Factor called Representative Frank a "coward" in a heated exchange last week for what he said was the congressman's refusal to step up and take accountability for his role in the failure of Freddie and Fannie. Many leading Democrats have said deregulation was to blame, while Republicans counter that President George W. Bush pushed a Fannie and Freddie reform package with increased regulation as early as 2004.

That reform effort did not garner enough support from any Senate Democrats, and a few Republicans, to ensure its passage. The Senate requires 60 votes to pass legislation, and Republican backers of the bill did not have the votes required to get the bill through.