WASHINGTON -(Dow Jones)- A key U.S. House Republican criticized the Obama administration Monday for failing to meet a Jan. 31 deadline to publish a proposal on how to reform mortgage giants Fannie Mae (FNMA) and Freddie Mac (FMCC).
The Dodd-Frank financial-overhaul law enacted last summer required the Obama administration to issue its report on how to overhaul the two government-controlled mortgage giants by the end of this month. Now that proposal is expected to be pushed back until mid-February, a delay Republicans call unacceptable.
"There is no legitimate reason for failing to have a plan," Rep. Spencer Bachus, (R., Ala.) said in a statement. "The Democrats always offer an excuse for not meeting deadlines, even those they themselves impose. It is clear the administration cannot make any tough choices required to protect taxpayers and end the bailout of Fannie and Freddie."
The remarks by Bachus, chairman of the House Financial Services Committee, suggest that the Democrats and Republicans are likely to engage in months of sparring over how much support the government should provide to the mortgage market.
Steve Adamske, a Treasury Department spokesman, replied by noting that there is "nothing in the Constitution that prevents the House Republicans from passing comprehensive [housing finance] reform."
The administration, he added "looks forward to working with Congress to enact comprehensive mortgage reform ... we will have our plan in the next couple of weeks."
The Obama administration's report is expected to contain several options for what should replace Fannie and Freddie, and discussions of the merits and drawbacks of those approaches.
Earlier this month, Rep. Jeb Hensarling of Texas, the House's fourth-ranking Republican, said he would introduce legislation to transfer Fannie's and Freddie's roles to the private sector within five years with no future government support.
That approach, however, is opposed by the housing and financial services industries, which say some federal support is necessary to make sure home loans are still widely available.
House Republicans have scheduled three hearings in the coming weeks about the housing market. They will focus on "how to wind down the operations of Fannie Mae and Freddie Mac in order to protect taxpayers," Bachus said.
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