Republicans: Halt Taxpayer Aid for Fannie, Freddie

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House Republicans said Wednesday that federal taxpayers should stop propping up Fannie Mae and Freddie Mac, and vowed Congress will wean the country away from its reliance on the two huge but fiscally feeble housing finance companies.

The bailout of the two mortgage giants has already cost taxpayers $150 billion.

Democrats agreed that changes are needed, but they say the cut could jeopardize the 30-year fixed mortgage rate and the access to the housing market that the two companies have helped provide to millions of moderate-income families.

The House Financial Services Committee met Wednesday, but took no action.

Rep. Scott Garrett, R-N.J., said his goal as chairman of the subcommittee is "to ensure that we put an end to this destructive and costly housing finance policy that protects taxpayers and actually strengthens communities instead of destroying them."

But there is some reluctance in GOP ranks to do anything too abruptly. Rep. Michael Fitzpatrick, R-Pa., said he wants the government's rule wound down but warned that doing it too quickly could harm the economy.

"We can't allow prudence to be the enemy of progress," he said.

Rep. Maxine Waters, D-Calif., the subcommittee's top Democrat, said she is open to any plan that takes steps like preserving the 30-year mortgage and helping all qualified borrowers get loans.

The Treasury Department is expected to release a report in the coming days. It will offer the Obama administration's suggestions on how to reshape Fannie and Freddie.

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