Privatize Fannie and Freddie? Maybe Later.

Reporting on Politics and Policy.
Dec. 29 2010 9:28 AM

Privatize Fannie and Freddie? Maybe Later.

From the start of the financial crisis, Republicans suggested that privatizing Fannie Mae and Freddie Mac would get at the root of the housing speculation problem and, in the words of Douglas Holtz-Eakin , "get them completely off the taxpayers' back." It was John McCain's 2008 stance, and it was the position of most Republicans throughout 2009 and 2010. And now? Alan Zibel checks in.

"We recognize that some things can be done overnight and other things can't be," said Rep. Scott Garrett (R., N.J.), incoming chairman of the House Financial Services subcommittee, which oversees Fannie and Freddie. "You have to recognize what the impact would be on the fragile housing market as it stands right now." ...

Many Republicans now concede that a speedy exit may not be practical, because Fannie Mae and Freddie Mac have such a dominant position in the nation's housing market. Mr. Garrett said he has "not established a specific timeframe for winding them down."

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If you're an optimist, maybe you can see Republicans implementing a long-term privatization plan. Garrett is saying this in the context of opposing the Fannie/Freddie status quo. But there will not be the quick dismantling of Fannie/Freddie that a lot of Republicans said we needed.

David Weigel is a Slate political reporter.