Shelby: Housing Rescue Will Be Enacted

After intense negotiations with Democratic counterparts, Sen. Richard Shelby of Alabama, the top Republican on the Senate Banking Committee—and a key opponent of previous Democratic efforts to pass a housing bailout—says he has reached agreement with Sen. Chris Dodd, the Connecticut Democrat who chairs the committee, on a housing package that would enable struggling homeowners to refinance into more affordable loans and create a stronger regulator for government-sponsored enterprises Fannie Mae and Freddie Mac.

Shelby spoke with The Home Front this morning. Excerpts:

What is the status of the negotiations between you and Senator Dodd on the housing package?
We have an agreement, a conceptual agreement. We are in the process of working out some of the language and a few remaining details. Senator Dodd has scheduled a mark-up on Tuesday. I feel at this point that our package will garner strong bipartisan support. I believe the White House and the Republican leadership will support this approach.

You will recall, and I've spoken on this before, my primary consideration as we have negotiated this package has been to protect the taxpayer. And I believe—without going into a lot of details, you'll have to wait on those—we have made significant progress toward that goal as far as the housing component and as far as [government-sponsored enterprises]. I've been in that fight for about five or six years, and I've pushed for a stronger regulator for years that can deal with some of their capital products, and this bill is moving down that right road. It would be a big improvement over what we have, and [we are] working together. I believe we are going to move this bill, but we told each other we wouldn't go into details until they dot the I's and cross the T's.

How would the liability of the rescue be transferred away from taxpayers?
We're moving it away from the taxpayers.

Are you confident that the Bush administration will support this bill?
I believe they will like this bill.

So this is something we are going to see enacted?
I think we are. We are not quite there yet. We're sitting on the diamond, and it's coming Tuesday. I'd tell you more if I could.