Fifty-six senators have voted down an amendment that would have required federal regulators either to privatize Fannie and Freddie or to put them into receivership (i.e. break them up and sell off the pieces) within two years. Two years! The Democrats’ excuse for opposing it? It would have forced the government to restructure the companies too quickly.
So what’s their alternative? A commission to study the options. We know what the options are: Keep Fannie and Freddie on $10-billion-a-month life support or start winding them down. Democrats prefer the former because Fannie and Freddie are central to their preferred policy of stopping foreclosures that probably need to happen.
Update: Credit where it’s due: Evan Bayh and Russ Feingold joined the GOP’s attempt to stop the bleeding.