From the WSJ:
Lawmakers Agree on Outline of Big Housing Pact
Bill Includes Relief For Fannie, Freddie; Tense Negotiations
By MICHAEL R. CRITTENDEN and DAMIAN PALETTA
July 23, 2008; Page A3
House and Senate leaders have largely hammered out a compromise deal on a mammoth housing package that would permit the government to bolster Fannie Mae and Freddie Mac in an emergency, overhaul supervision of the housing-finance giants and allow the government to insure up to $300 billion in refinanced mortgages.
The deal comes after tense negotiations and is likely to remain a source of contention when the House of Representatives votes Wednesday. The nonpartisan Congressional Budget Office said Tuesday that a temporary measure to prop up Fannie Mae and Freddie Mac could cost the government as much as $25 billion. And despite repeated White House veto threats, lawmakers plan to include a $4 billion program that would allow local governments to buy and rehabilitate foreclosed properties.
It remained unclear whether the White House would follow through on veto threats, particularly because administration officials have actively lobbied in support of major provisions.
“It’s a lengthy bill and we’re reviewing the language,” White House spokesman Tony Fratto said. “It’s clear that the Democrats chose to play politics with the legislation, and unfortunate that they’re doing it with legislation that will prevent systemic risk to our financial system.”
The bill is expected to easily pass the House and will likely pass the Senate. Many Democrats and Republicans have said fears about the fragile state of the financial markets necessitate action, and this bill is likely to be Congress’s most expansive attempt to address the nation’s housing woes this year.
“Nobody in America will agree with everything that is in this bill, but I think enough people in America will find it acceptable, so it will go to the president’s desk to be signed,” House Financial Services Committee Chairman Barney Frank (D., Mass.) said.
Lawmakers plan to raise the public-debt limit as part of the legislation to $10.6 trillion from $9.8 trillion. Congress must vote to increase the limit to account for additional borrowing, something it is loath to do, although it would have had to take that step this year even without the rescue plan for Fannie and Freddie, Democratic aides said.