CBSN

Hill Leaders Didn't Hear About Fannie/Freddie Deal Until Last Minute

Congressional leaders weren't exactly on speed dial late last week when Treasury Secretary Henry Paulson decided to pull the trigger on the massive Fannie Mae and Freddie Mac takeover.

Speaker Nancy Pelosi (D-Calif.) got a phone call on Saturday, after the Fannie Mae/Freddie Mac deal had already made it into The Washington Post, according to a Democratic aide.

Minority Leader John Boehner (R-Ohio) also got a call Saturday along with Senate Majority Leader Harry Reid (D-Nev.), Senate and House aides said. Financial Services Chairman Barney Frank was fortunate enough to get a call Friday, considering he wrote the legislation that gave Paulson the power to seize the massive housing agency.

And when they got the news, everyone seemed resigned to accept that there was no other choice but to have the federal government put the under capitalized companies into a receivership.

"Reid seemed pleased on Saturday after his conversation with Paulson," Reid spokesman Jim Manley said.

Paulson's big move, designed to look decisive and aimed stabilizing financial markets, stands in contrast to the back and forth negotiating Paulson had with Pelosi, Reid and other congressional leaders back in January when the economic stimulus legislation passed.

At this point, Congress has no role in signing off on the Fannie/Freddie takeover because Congress gave Paulson the authority to do this when it passed the housing bill earlier this summer.