The first budget proposal of the Trump Administration has just two lines on the government sponsored enterprises, Fannie Mae and Freddie Mac, but those two lines speak volumes.

On page 213, under the heading, “The Future of the GSEs,” the discussion reads, “The Administration has publicly expressed its desire to work with members of Congress tofacilitate a more sustainable housing finance system. Any reform of the housing system likely will impact the cash flows attributable to the GSEs in the 2018 Budget projections in ways that cannot be estimated at this time.”

net worth sweep Fannie Mae Freddie Mac housing finance system
By User:AgnosticPreachersKid (Own work) [CC BY-SA 3.0], via Wikimedia Commons

In contrast, the corresponding section to the last budget proposal from the Obama Administration went on for more than a full column and started, “To finish addressing the weaknesses exposed by the financial crisis, the housing finance system must be reformed, and Fannie Mae and Freddie Mac should be wound down.” It goes on to praise Congress for its “meaningful steps” Congress had taken to advance bipartisan legislation and stresses that reform depends on legislation by Congress.

The Trump Administration continues to avoid sweeping pledges to upend the secondary mortgage market. The budget document also reiterates Treasury Secretary Steven Mnuchin’s public comments that the Administration will work with Congress on ways to end government control of Fannie and Fannie. Importantly, however, it does not entrust to Congress a task which Congress itself entrusted to Fannie and Freddie’s conservator in the Housing and Economic Recovery Act of 2008.

A president’s budget is a political document and not merely a collection of tables with long columns of numbers. It is a statement of underlying government philosophy, vision, assumptions about what policies work or don’t, and what changes are needed in programs to make sure taxpayers are getting the most for their money.  To that end, President Trump’s budget could have expressed antipathy for Fannie and Freddie and its shareholders or stressed the need for a wholesale remaking of the entire housing finance system.  Instead, the document merely states a better system is needed and getting there will require some adjustment in budget figures down the road.

That sounds like a better mindset than that which guided the previous administration and a more measured perspective on how to serve the interests of homebuyers, shareholders and taxpayers.