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PubliColaTV: Freddie Mac. What Would Sen. Murray Do?

By Bryce McKay August 18, 2010

[youtube]http://www.youtube.com/watch?v=mtDGvw1fHJc[/youtube]

At a press conference yesterday, Senator Patty Murray touted the Wall Street Reform bill passed by congress last month, saying that the new law “holds Wall Street accountable, and guarantees that American taxpayers will never again have to pay to bail out Wall Street or clean up after big banks’ messes.”

But the New York Times reports that Freddie Mac posted a $6 billion loss in the second quarter this year, and Freddie is requesting an additional $1.8 billion in federal aid money. So I asked Murray whether she would support sending some more money Freddie’s way.

And she almost answered. She said it will be a treasury department decision and there won’t be a senate vote on the topic.

Which is fine. But for a campaign that has focused so much on eliminating bailouts—“American taxpayers will never again have to pay to bail out Wall Street or clean up after big banks’ messes,” she said at the press event— it seems like she should be able to offer an unequivocal no.

Murray's Campaign Communications Director Julie Edwards followed up with me via email to clarify the senator's answer:
“Senator Murray firmly believes that we need to reform Freddie Mac and Fannie Mae. This process must be done carefully and thoughtfully given their role in stabilizing the housing market.”

Edwards went on to bash the potential Republican plan for reforming Freddie Mac:
“She is looking at all proposals on reform, but it's important to note that the preferred Republican approach—assuming the big banks take over the entire mortgage market—would likely mean a massive loss of credit availability to future homebuyers. [And] it would be particularly damaging to homeowners who are currently at risk of foreclosure. And she’s not exactly ready to hand the entire future of the housing market over to the big banks that helped get us into this mess.”

I've emailed the National Republican Senatorial Committee and called Dino Rossi spokeswoman Jennifer Morris to get their take on Edwards' claim.

UPDATE:

Edwards is referring to a GOP plan, sponsored by Sen. John McCain, that would have first limited government support of Freddie Mac and Fannie Mae —the federally supported firms that buy mortgages and sell them to investors to increase the pool of money that's available for mortgage lending—and set up a plan to phase them out of government stewardship.

National Republican Senatorial Committee spokesman Brian Walsh tells PubliCola:

"She [Sen. Murray] voted against a measure that would put a firm timeline in place for Congress to end the bailouts.  So her tired rhetoric of simply blaming the Republicans rings hollow when she is on record opposing even a basic timeline."

Sen. Murray voted against the McCain amendment back in May, which lost 56-43 on a straight party line vote with only Sens. Russ Feingold (D-WI) and Evan Bayh (D-IN) siding with the Republicans. (The Democrats argued that putting Fannie and Freddie on the fast track to dissolution would have atom-bombed the mortgage market.)

Additional reporting by Josh Feit.
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