Senator Bob Corker : Time to Jumpstart Fannie/Freddie Reform

Update from Senator Bob Corker
March 16, 2013

Watch Senator Corker on Fox News Sunday

Tomorrow (March 17), Senator Corker will be a guest on “Fox News Sunday” to discuss the budget battle on Capitol Hill and other news of the week. See below to find out on what station and at what time the program airs in your area. For locations not listed below, click here.

Time to Jumpstart Fannie/Freddie Reform

In an effort to spur substantive and structural housing finance reform, Senator Corker introduced the "Jumpstart GSE Reform Act” this week. He was joined in the effort by Banking Committee colleagues Mark Warner, David Vitter, and Elizabeth Warren.

The legislation would prohibit any increase in the guarantee fee (commonly called the “g’fee”) – which is required to be charged by government-sponsored enterprises Fannie Mae and Freddie Mac – from offsetting other government spending. Additionally, the bill would prohibit the sale of preferred shares without congressional approval and structural housing finance reform.

"The reality is that if Congress were to spend ‘g’fee’ revenue from the GSEs on other programs, reforming these mortgage behemoths would become nearly impossible. At the same time, if Treasury were to decide to sell its preferred share investment without Congress having first reformed our housing sector, we would just be returning to a time where gains are for private shareholders and losses are for taxpayers. Neither of these is an acceptable outcome, so I’m very happy that Senators Warner, Vitter and Warren have joined me in this effort, and I hope Congress will take the necessary steps to ensure housing finance reform can happen as soon as possible," said Corker.

Thursday’s Wall Street Journal opinion article by George Melloan underscored the need for substantive and structural housing finance reform and several industry leaders praised the “Jumpstart GSE Reform Act” as a step in the right direction.

Wall Street Journal (Opinion): Fannie, Freddie and the Government's House of Cards
“…The moral is that government backing—implicit during the heyday of Fannie and Freddie and explicit today—leads to sloppy banking and ultimately to defaults. Taxpayers, with little knowledge of the commitments made on their behalf, become responsible for the losses… When the whole edifice collapses, who will be left to pay the bill?” Read more: http://on.wsj.com/10St4MW.

Politico PRO: DeMarco calls bipartisan GSE bill ‘terrific’
“Federal Housing Finance Agency Acting Director Edward DeMarco today praised a bipartisan bill introduced this week that was meant to ‘jumpstart’ discussion for how to replace Fannie Mae and Freddie Mac… ‘I think it’s a terrific sign,’ DeMarco said at a housing summit hosted by JPMorgan Chase in New York today. ‘What they’re saying is let’s get this discussion going.’ He said that the two companies are in danger of becoming harder to replace without the bill because they ‘become a funding a vehicle for the government.’”

Mortgage News Daily: Senators Introduce Bill To Prohibit G-Fee Hikes Being Used For Spending
“David H. Stevens, President & CEO of the Mortgage Bankers Association (MBA), issued the following statement in response to the recently released ‘Jumpstart GSE Reform Act’: ‘The Jumpstart GSE Reform Act is yet another clear example of the need for substantive GSE reform. U.S. Senators Bob Corker, R-Tenn., Mark Warner, D-Va., David Vitter, R-La., and Elizabeth Warren, D-Mass, are to be commended for introducing this piece of legislation and spearheading a transparent, complete discussion about the future of GSEs and the government’s role in the housing markets… It is imperative that Congress as well as the White House and key members of the housing community come together to create a comprehensive, transparent process that properly addresses the concerns and objectives of all affected stakeholders involved with GSE reform. Without this all inclusive, broad approach, uncertainty will continue and the housing market will be unable to fully rebound.’” Read more: http://bit.ly/Z7ynUB.

“Too Big to Jail”

On Tuesday, Senator Corker and Senator Warner wrote to Attorney General Eric Holder asking him to clarify his “too big to jail” remarks.

In a hearing on March 6, Holder stated, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large.”

In their letter, Corker and Warner ask if it is “truly the position of the Department of Justice that some financial institutions are large enough that their management is above prosecution in the case of a serious crime.” They further note that “like many of our colleagues, we believe that criminal behavior at any institution ought to be prosecuted, and responsible parties held accountable.”

Obama Administration Needs to Explain Changes to Missile Defense Plans

Following Secretary of Defense Chuck Hagel’s announcement that the U.S. is deploying 14 ground-based missile interceptors in Alaska, Senator Corker, ranking member of the Senate Foreign Relations Committee, called on the Obama administration to explain changes to its missile defense plans for the United States and Europe.

“I am pleased with the decision to provide greater protection to our country from existing and emerging threats by advancing a purchase of 14 ground-based interceptors. That said, I do expect an in depth assessment to be provided between this approach and what would have occurred under the European Phased Adaptive Approach previously planned and reaffirmed under the New START treaty, including an assessment of advantages that would have been realized under full implementation of EPAA,” said Corker. “In addition, I call on the administration to go further and reposition available resources and expedite consideration for an East Coast missile defense site to ensure a more robust protection against the very real threat of ICBMs.”

NATO Allies Need to Meet Commitments on Defense Spending

Senator Corker agrees with Navy Admiral James Stavridis’s remarks on the need for NATO allies to meet their commitments on defense spending. All North Atlantic Treaty Organization (NATO) allies have agreed to allocate two percent of their gross domestic products on defense spending, but few currently meet that level of investment.

“I commend Admiral Stavridis for stating the view shared by many Americans: our NATO allies are not carrying their weight, forcing American service members and taxpayers to bear the heaviest burden in NATO-led missions. This current arrangement where only three of the 28 nations meet their commitment to invest two percent of their economies on defense cannot continue,” Corker said.

Tennesseans Visit Washington

On Tuesday, Senator Corker and Senator Alexander met with students from East Tennessee State University. The scholarship winning students were in Washington during their spring break to meet their representatives and learn about leadership in government.

March 12, 2013 – Senator Corker meets with students from East Tennessee State University.

Senator Corker addressed the Nashville Health Care Council’s 11^th annual Leadership Health Care delegation in Washington on Thursday. Corker spoke to the group about a number of topics, including the health care challenges facing the nation, the ongoing budget battle on Capitol Hill and his new role as ranking member of the Senate Foreign Relations Committee.

March 14, 2013 – Senator Corker addresses the Nashville Health Care Council’s annual meeting in Washington. (Photo courtesy of NashvillePost.com)

Later on Thursday, Senator Corker addressed members of the United States Senate Youth Program (USSYP). USSYP is a week-long experience in Washington for outstanding high school students interested in pursuing careers in public service. Two student leaders from each state spent the week in Washington experiencing their national government in action. Prior to addressing the group, Corker met with Tennessee’s two student representatives, James Markos of Jackson and Samira Ibrahim of Sevierville.

March 15, 2013 – Senator Corker addresses members of the United States Senate Youth Program. (Photo courtesy of Jakub Mosur)

March 15, 2013 – Senator Corker meets with Tennessee’s USSYP representatives, James Markos of Jackson and Samira Ibrahim of Sevierville. (Photo courtesy of Jakub Mosur)