Senate invokes cloture on housing measure

The Senate moved along a broad housing-rescue package supposed to help strapped borrowers, mortgage giants Fannie Mae and Freddie Mac and communities hit by the foreclosure crisis.

The 80-13 cloture vote means final passage is likely at an 11 a.m. Saturday vote, following an extended post-cloture effort made necessary by Sen. Jim DeMint (R-S.C.). DeMint is objecting to a provision in the bill that allows Fannie and Freddie to lobby Congress.

{mosads}The legislation may be the last passed before lawmakers adjourn for their August recess. Republicans are threatening to block progress on any other topic besides energy, where a key cloture vote failed Friday.

Majority Whip Dick Durbin (D-Ill.) said the urgency of the housing crisis and the reversal of a veto threat from President Bush was the only reason that the housing issue is moving forward.

“The White House has finally conceded to the bill,” Durbin said. “That’s key to getting it done.”

The House passed the measure by a vote of 272-152 — with 45 Republicans supporting it — on Wednesday.

The provision aimed at propping up Fannie and Freddie, which are known as the government-sponsored enterprises (GSEs), could widen the deficit by up to $25 billion over two years, according to the Congressional Budget Office. However, CBO also stated that there is a better than even chance that the provision would not cost taxpayers anything. Stock in both firms plunged this month on solvency fears that federal officials and politicians said were largely unfounded.

The underlying bill would allow for the refinancing of up to $300 billion in distressed mortgages, enact a package of tax breaks to help the housing market and tighten oversight of Fannie and Freddie.

The bill would give Treasury the authority to offer the GSEs an unlimited line of credit and buy stock in the companies for 18 months. It would also give the Federal Reserve the power to consult with the GSE’s regulator on the companies’ capital levels and other matters that could pose a risk to the financial system.