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Republicans Demand Accounting Change of Fannie Mae Bailout Costs

The U.S. House of Representatives voted to require the Obama administration to more fully incorporate Fannie Mae and Freddie Mac into its annual budget.

The chamber today voted 245-180 to require the federal government to use an accounting method that would recognize more of the costs of its 2008 takeover of the mortgage companies.

Representative Scott Garrett, a New Jersey Republican, said the method would more accurately represent the costs to taxpayers.

“If we truly are committed to balancing the budget and paying down our debt, we need to fully disclose all of our existing liabilities,” Garrett said.

That accounting method already is used by the Congressional Budget Office.

Democrats opposed the measure, mostly because of other provisions they said would inflate the projected costs of a number of federal credit programs. Seven Democrats voted for the bill; two Republicans opposed it.

Chances in Senate

The measure now heads to the Senate, where it is unlikely to win passage.

The measure would require the administration to calculate the net lifetime cost of loans and loan guarantees made by Fannie Mae and Freddie Mac, taking into account likely income and projected losses. The administration counts only the cash injections periodically needed by the agencies.

The legislation stops short of integrating Fannie Mae and Freddie Mac into the federal budget, which would mean counting the debt they’ve issued to hold loans or guarantee $5 trillion in mortgages against the government’s debt limit. That would have required Congress to lift the legal cap on borrowing.

The bill is H.R. 3581.

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