was auctioned for just two thousand dollars and with the government in control of fannie and freddie. american taxpayers stand behind six trillion dollars in mortgage debt now the government says it has to get out we need to wind down fannie and freddie and substantially reduce the government's footprint in the housing market it's a departure from past government policies which have treated homeownership as a virtual right and report to congress now the obama administration says the goal is affordable housing not for all americans to be homeowners analysts say alternately withhold policies and fannie and freddie going by the wayside so too will the white picket fence dream they helped manufacture it can it interest rates are going to have to go up because the risk of lending to homeowner goes up and fewer parties a want to get in on that. you know homeownership orders and it's not just the u.s. middle class that's going to feel it foreign countries all over the world hold billions upon billions of u.s. home mortgages in their portfolios doing away with fannie and freddie could amount to massiv

freddie mac. what we do is we say when you actually buy a home you're really going to be a homeowner you can actually achieve that american dream it's going to be a little bit more expensive so you're not going to maybe i hold in your twenty's you made by in your thirty's but that should be ok could it be that you never get to buy a home considering the way i. look at the economy right now look at unemployment we've seen so many study after study that says that this generation is going to be going to make less money than their parents did i mean do you think that americans can actually come to accept that that perhaps they might never ever be a home. if people are not able to buy a home ever in their lives it's not going to be because fannie mae and freddie mac. own existence. it's not going to be because i will say it is not opening as a goal it's to support basically investors on wall street financing american homes . there certainly are going to be individuals that may never own a home that's maybe that's good maybe that's but it's appends and really where you live you may never be able to own a home in washington d.c.

freddie mac. housing financial analyst at the american enterprise institute released their report on reforming the housing finance system in response to that plan. this is one hour. >> we want to welcome you to this discussion of our white paper on housing finance. there is a history here that i would like to review. we first came out with a preliminary draft of this paper in late january. we did it at that point as the draft because we were waiting for the administration's proposal to come forward. when it did, which was on february 11, to our surprise, they included in option one the ideas that were in our original draft. that give us the sense there was a possibility here of an agreement. between those of us who favor free markets in general and in the housing finance area and the administration. the republicans in congress would be a major element of any such agreement. in responding to what the administration did on february 11, we prepared a final version of this white paper and that is what all of you have. it is on the website at aei and it is available to anyone who wants a copy. we also

americans. for many years, it seemed like republicans on this committee have pressed her reform fannie mae, freddie mac and the fha. it is my hope today you can confirm your commitment to work with us. housing is one of the most important cornerstones of our economy and we have get it right. so with that, i would yield back the balance of my time. >> thank you. he's still a 33 seconds left in our claim that time. i do want to say that former chairman frank who was the leading advocate for fannie and freddie just give us a history lesson. in 2003, he said neither of these gics were in crisis than they do not need more regulation two years later he said they have to be pushed to make more affordable loans, i.e. subprime loans, not us. so that part of the history lesson was missing in our time of six hired. >> two minutes, mr. chairman. i'll take two. >> well, we've just heard a serious distortion. in 2003, i didn't think and freddie needed reform. in 2005, the chairman joined in chairman mr. oxley and passing a bill, which was derided as insufficient and senate republicans rejected the house republic

american people ought to be demanding accountability with that. at the same point -- and there have been reforms regarding recent legislation but not enough. what are we going to do about fannie mae and freddie mac? here is another angle i think you have to keep in mind. the four factors that caused the mortgage-related subprime crises, that end up imposing a lot of losses on taxpayers increasing the deficits and debt dramatically, exist but the federal government own finance system. the risks are much greater and nobody is going to bail out america. we have to solve our own problems and elected officials better get started. host: jim and oxford, mean. you are on the line with a david walker. caller: good morning, mr. walker. how are you? a couple of questions. you say the entitlements are probably hurting us the most -- the biggest deficit. why did they cut the 2% from medicare payments -- and what i have not heard, the employer pays 2% less? and the other question is, when i they going to raise the limit of what people pay into social security? they raised it for years -- and gets up to $100,000 and they did not what people make more money to pay an extra in. those two things to not make s

i believe we will soon be upon the third anniversary of the american taxpayers bailout of fannie mae and freddie mac. if ever history provides a clear lesson on the importance of congress acting in a timely manner, it is this committee's failure i believe to address the gse. the demise of fannie and freddie could have been prevented at -- had the committee acted sooner. unfortunately, the gse's were a powerful political force right up until the time that they collapsed. fannie and freddie's disproportionate influence on this committee and congress ultimately cost the taxpayers billions and should be long remembered as a major major policy mistake. finally mr. chairman i would like to take a moment to discuss and recent news reports about a proposal that has been described as a quote global mortgage servicing settlement. based on the facts reported i have serious concerns not only about the substance of the proposal but also about the process. what is occurring appears to be nothing less than a regulatory shake down by the new bureau of consumer financial protection, the fdic, the federal reserve

freddie mac? >> absolutely. >> thank you, mr. chairman. >> thanks again to secretary geithner and secretary donovan for being here today. it is set the essential to have an affordable housing market for american families. white paperration's is a good starting point to do that. i look forward to continuing these discussions as we further explore the options presented today. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> that was treasury secretary to tim geithner and housing secretary shaun donovan testifying about changes to the mortgage finance system. the house will debate eliminating the federal mortgage program. we will hear more about that in a moment. steven chu will be on capitol hill, joined by the chairman of the nuclear regulatory commission. they will be asked by -- about u.s. nuclear safety following last week's earthquake in japan. that is from a joint house- senate subcommittee hearing. that is on c-span3 and c-span radio. >> the c-span networks -- providing coverage of politics, public affairs, nonfiction books, and american history. it is all available to you on television, radio,

i believe we will soon be upon the third anniversary of the american taxpayer bailout of fannie mae and freddie mac. if every history provides a clear lesson on the importance of congress acting in a timely manner, is this committee's failure, i believe, to address the gst's. -- gse's. unfortunately, they were a very powerful political force right up until the time that they collapsed. fannie and freddie's disproportionate influence on this committee in congress ultimately cost taxpayers billions and should be long remembered as a major, major policy mistake. mr. chairman, i like to take a moment to discuss recent news reports about a proposal that has been described as a "global mortgage servicing settlement." mr. on the facts reported, i have serious concerns not only about the substance but also the process of the proposal. it appears to be nothing less than name regulatory shakedown by the consumer protection agency, certain attorney general's and others led by elizabeth warren. the proposed settlement seems to be an attempt to advance the administration's political agenda of rather than an

americans. for many years, its seemed like republicans on this committee have pressed to reform fannie mae, freddie mac and the fha. so it is my hope that today you can confirm your commitment to work with us. housing is one of the most important cornerstones of our economy, and we have to get it right. so with that, i would yield back the balance of my time. >> thank you. you still have 33 seconds left and i will claim that time. i do want to say that the former chairman frank who was the leading advocate for fannie and freddie just gave us a history lesson. but in 2003, he said that neither of these gse is was in crisis and they did not need more regulations. two years later, he said the ought to be pushed to make more affordable loans, on econ subprimal loans, not less. so, that part of the history lesson was missing and our time is expired. >> two minutes, mr. chairman? >> i will take two of my remaining minute. spec two additional minutes. >> we heard a serious distortion that in fact, yes, in 2003i didn't think fannie and freddie needed reform. you want to be into history? and to those of fiv

freddie and helping private capital back to the market. private capital has retreated and not yet returned. that assistance has been the essential in helping bring in measures to the housing market and ensure americansave access to mortgage credit. it is not a long-term solution. we recommend a combination of tools to wind down fannie and freddie overtimes such as guarantees to load limits and underwriting standards. we need to wind down the investment portfolio and shrink our footprint in the housing market. we're not going to get private capital to come back and replace the government unless we fix the remaining problems in the private mortgage market. the second part of our plan is to make the necessary reforms to provide better protection for lenders and investors and help restore confidence in the market. this means helping consumers making informed decisions that protect them from deceptive practices. that means participants will retain a risk and transparency. bakes' will have to hold more capital so they are in a better position to withstand future downturns. it means of addressing the chronic problems we sell -- we still see by improving industry incentives. our third objective is to target

given the fact that if you talk to the american consumer and say what is the government's biggest homeownership program, they're going to say two names: fannie and freddie and fannie and freddie right now have such bad press that i think if you told people that santa claus had two evels named fannie and freddie, they'd be against christmas. [laughter] it's very bad. so given that situation, i'm not surprised at all where we are. where should the gses go and whether they'll even be called xses -- gses, i think there absolutely needs to be a secondary market for the financial structure to move forward. >> and a government role in that? >> i think there has to be a government backstop, yes. and i'll give you two examples of y. the first, if any of you are old enough to remember the oil patch days in the '80s when the commercialanking sector absolutely packed up and left oklahoma and texas. the only capital flow into those depressed states was because of the presence of the gses. they kept those states and anybody who lived there, anybody who did business there at that time will tell you that the presence of the gses kept those states above water. the secon

given the fact that if you talk to the american consumer and say what is the government's biggest homeownership program, they're going to say two names: fannie and freddie and fannie and freddie right now have such bad press that i think if you told people that santa claus had two evels named fannie and freddie, they'd be against christmas. [laughter] it's very bad. so given that situation, i'm not surprised at all where we are. where should the gses go and whether they'll even be called xses -- gses, i think there absolutely needs to be a secondary market for the financial structure to move forward. >> and a government role in that? >> i think there has to be a government backstop, yes. and i'll give you two examples of why. the first, if any of you are old enough to remember the oil patch days in the '80s when the commercial banking sector absolutely packed up and left oklahoma and texas. the only capital flow into those depressed states was because of the presence of the gses. they kept those states and anybody who lived there, anybody who did business there at that time will tell you that the presence of the gses kept those states above water. the s

freddie mac. >> did we get too far? >> the goal of home ownership as the only measure of success is probably the wrong one. the right measure of success is approaching every american to pelt with their needs. housing options for you, and home ownership made good sense. i also think there's a difference in the two periods thatou mentioned, the 1990s and the 2000s. in the 1990s we learned a lot about how to do affordable home ownership right, and we learned there are ways to mitigate risk of low down payments because home ownership is, ultimately, at the end of the day, one of the ways we encourage asset development. we have enormous disparities in our society in wealth and asset ownership between particularly low and modern income and minority families and others, and we need give people access to home ownership kind of forced savings as one of the ways that we should be encouraging wealth development. in the 2000s we kind of decided home ownership was good even though it was clear these products were completely irrationally priced. and the fact that it was expanding home ownership made people unwilling to step in and take what were obviously, reasonable steps. so

given the fact that if you talk to the american consumer and say what is the government's biggest homeownership program, they're going to say two names: fannie and freddie and fannie and freddie right now have such bad press that i think if you told people that santa claus had two evels named fannie and freddie, they'd be against christmas. [laughter] it's very bad. so given that situation, i'm not surprised at all where we are. where should the gses go and whether they'll even be called xses -- gses, i think there absolutely needs to be a secondary market for the financial structure to move forward. >> and a government role in that? >> i think there has to be a government backstop, yes. and i'll give you two examples of why. the first, if any of you are old enough to remember the oil patch days in the '80s when the commercial banking sector absolutely packed up and left oklahoma and texas. the only capital flow into those depressed states was because of the presence of the gses. they kept those states and anybody who lived there, anybody who did business there at that time will tell you that the presence of the gses kept those states above water. the s

fannie and freddie, we're charging them 10% interest and they have to pay us back and the american people are angry because of that. we gave away $51 million, $60 million to another. and as my friend, joe baca, said chicanos por la casa got $100 million. we are not charging you interest. we gave you money. now, are we helping housing in this country? housing sales fell for the lowest levels since 1959. 11.8% fall in single family. 47% in multifamily tell me one thing this has done that has not kept one person in their house. now, let's assume this is supposed to be helping poor people buy houses. you just lost your house. in hawaii a person making $73,825 can buy a house through these organizations. a person in california making over $48,000 can buy a house. a group in virginia, $74,000. new jersey, $78,000. massachusetts, $72,000. alaska, $76,000. colorado, $73,000. new hampshire, $79,000. so a group, an entity, a county, a city can buy a house. they have to sell it for less than they have in it and they can sell it for less than the person buying the house. how does that help poor peopl

freddie mac? >> absolutely. >> thank you, mr. chairman. thanks again to secretary geithner and secretary donovan for being here today. it is set the essential to have an affordable housing market for american families. i look forward to continuing these discussions as we further explore the options presented today. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> ishmeal reed is on "in debt think you his written over 25 books, including "airing dirty laundry," and "barack obama and jim crow media." this is sunday april 3 on c- span2. like previous programs at our website where you can also find the entire weekend schedule. "washingtonow's journal," we will look it u.s. preparedness for natural or man- made disasters. we will talk to loretta sanchez and then republican congressman steve king on the current budget debate and a temporary spending measure passed by the house. later, sharon squassoni will give an update on the nuclear plants of japan. each morning at 7 eastern. later in the morning on c-span3, nuclear safety will be among the topics that energy secretary steven chu will testify about.

american people ought to be demanding accountability with that. at the same point -- and there have been reforms regarding recent legislation but not enough. what are we going to do about fannie mae and freddie mac? here is another angle i think you have to keep in mind. the four factors that caused the mortgage-related subprime crises, that end up imposing a lot of losses on taxpayers increasing the deficits and debt dramatically, exist but the federal government own finance system. the risks are much greater and nobody is going to bail out america. we have to solve our own problems and elected officials better get started. host: jim and oxford, mean. you are on the line with a david walker. caller: good morning, mr. walker. how are you? a couple of questions. you say the entitlements are probably hurting us the most -- the biggest deficit. why did they cut the 2% from medicare payments -- and what i have not heard, the employer pays 2% less? and the other question is, when i they going to raise the limit of what people pay into social security? they raised it for years -- and gets up to $100,000 and they did not what people make more money to pay an extra in. those two things to not make s

freddie mac? >> absolutely. >> thank you, mr. chairman. >> thank you again to secretary geithner and secretary donovan for being here today. it is essential that we can work on a stable housing market for american families. the administration is a good standing -- starting point for a discussion on how to do this. i look forward to continuing the discussions as we further explore the options presented today. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> we will take a back to the house in 10 minutes when they return to business. they will take up the sixth temporary spending bill. and i look at the u.s. capitol with the flag at half mast in the capital and across washington today and the honor of frank buckle. he will be laid to rest later today. a live look at arlington national cemetery memorial chapel. he is the last american veteran of world war ii lying in honor at arlington until about 2:00 p.m. eastern where the grave site burial is set for 4:00 p.m. eastern and he will be laid to rest in arlington section 34, the final resting place for general john pershing who led the expeditionary forces

american families. now over the next 10 years, our estimates on conservative assumptions show the total cost of the taxpayer of our support for fannie and freddie will be well below $100 billion. the current estimates are about $75 billion, but that does not take into account proposals to gradually raise guarantee fees. so what we were to implement this plan, we'd expect the ultimate cost of the tax payer to be lower. the process of reform will take years if they said, as we debate these options, we have to be careful that our actions to reform the market do not jeopardize either the housing market of for the broader economic recovery now underway. our proposal aims to achieve three key object did some responsible timeline. first, we want to wind down fannie and freddie can help bring private capital into mortgage market. in the wake of the crisis, private capital for the market and is not your return, leaving the government to guarantee for the nine out of 10 new mortgages. that assistance was essential and gave americans ask that. we believe under normal conditions, under reform market to private sectors with stronger oversight that are stand