The Obama administration has announced that it will not pursue the overhaul of Fannie Mae and Freddie Mac until 2011, nor will it include the money-losing government-sponsored enterprises (GSEs) in the federal budget.Â
Reuters reports that in testimony before the House Budget Committee, Treasury Secretary Timothy Geithner stated that the administration wanted to put distance between the ongoing housing crisis and its plans to enact GSE reform. Geithner stated that the administration will outline a series of ‘principles and broad objectives’ for reconfiguring Fannie Mae and Freddie Mac during the year, which will be open for public comment, but a specific plan for their post-conservatorship period will not be offered until next year.
The administration had originally announced it would offer its plans for the GSEs in the fiscal year 2011 budget. However, neither GSE will be included in the budget.
‘We do not think it is necessary to consolidate the full obligations of Fannie and Freddie onto the nation's budget,’ said Geithner, adding that the administration will continue to assure investors that that "those two important government-sponsored enterprises can continue the role they need to play."
Fannie Mae and Freddie Mac have been under federal conservatorship since September 2008.