“I’m confident that when it reaches the floor, there will be an overwhelming show of bipartisan support for this common sense, reform legislation.”
These were the words of Senator David Vitter (R-Louisiana) in reference to the Jumpstart GSE Reform Act, a bipartisan amendment Vitter introduced to the Transportation, Housing and Urban Development, and Related Agencies Appropriations Act in conjunction with colleagues Senator Bob Corker (R-Tennessee), Senator Mark Warner (D-Virginia) and Senator Elizabeth Warren (D-Massachusetts). The Jumpstart GSE Reform Act is an attempt to introduce substantive housing finance reform, and would prohibit the use of the GSE guarantee fees to offset unrelated spending. It would also prohibit the U.S. Treasury from selling its preferred shares in Fannie Mae and Freddie Mac without congressional approval.
The same four Senators introduced similar legislation in 2013, a bill that was all but dead on arrival.
“Reforming a broken housing finance system and protecting taxpayers is a win win, and we can begin that effort with this bipartisan GSE reform proposal. This bill shows that Republicans and Democrats do agree on the urgency required to reform the mortgage finance system. Reform can’t happen if the U.S. Treasury pulls a fast one on taxpayers by selling their preferred share investment but our bill will ensure the taxpayers will get the reform they were promised in 2008,” said Vitter at the time.
But the bipartisan Fannie Mae reform bills continue to stall.
Could it be Vitter’s confidence and steadfast determination to bring about GSE reform that contributed to his downfall? Vitter just recently lost his bid to become Louisiana’s next Governor. After the defeat, Vitter announced that he would not be running for reelection to the Senate. The defeat was national news because it could have ramifications for the Democrats and Republicans, but few noted how it could also change the equation regarding GSE reform.
The Jumpstart GSE Reform Act isn’t Vitter’s first foray into GSE reform. Earlier this year, Vitter joined U.S. Representative Ed Royce (R-California) in filing legislation to cap GSE CEO pay. Vitter authored the Senate version of the bill that passed the Senate by unanimous vote in September. The bill would cap Fannie Mae and Freddie Mac CEO pay at $600,000 year each, thereby suspending the $4 million compensation package proposed by FHFA Director Mel Watt.
The House’s version of the bill was passed two weeks ago, and was just signed by President Obama on November 25th.
But those GSE reform victories have been few and far between. Vitter has championed reform efforts, but by and large, there has been little meaningful progress since the GSEs entered conservatorship and were propped up by a $187.5 billion taxpayer bailout seven years ago.
A recent article in The Advocate touched upon Vitter’s limited success. Aptly titled, “In U.S. Senate, Vitter has more success filing bills than getting them passed,” author Gregory Roberts notes that since January, Vitter has introduced 100 bills as the lead sponsor, more than double the runner-up, Senator Ron Wyden (D-Oregon) with 53. Only two of those have passed, one of them being the bill to limit GSE CEO pay, as outlined above.
Vitter has also fought for coastal restoration, hurricane relief and highway funding with some success. His efforts to repeal Obamacare, to strengthen regulation of toxic chemical substances and reform banking rules much less so.
With Vitter’s departure from the Senate, Congress not only loses one of its most vocal advocates for badly-needed housing finance reform, but it also loses someone who has repeatedly reached across the aisle to sponsor bipartisan legislation—a rarity in today’s political climate.