Sen. Shelby Strikes Again

Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) has postponed a planned mark up of long-stalled legislation to revamp regulation of mortgage finance giants Fannie Mae and Freddie Mac because he and Sen. Richard Shelby (R-Ala.) have yet to reach agreement on the bill.

Negotiations are ongoing, said a Democratic aide. "Given the importance of the legislation, Sen. Dodd believes it's appropriate to allow more time to reach a bipartisan consensus," the aide said.

The mark up had been planned for May 6.

With only a one-seat Democratic majority on the panel, Dodd typically strives to reach agreement on legislation before convening the formal mark up so as to ensure bills come out of his committee with strong, bi-partisan support.

The House long ago passed its own overhaul of Fannie, Freddie and the 12 Federal Home Loan Banks, legislation that received the White House's support.

But Shelby is a staunch critic of Fannie and Freddie. While the White House has moved toward a more accepting attitude to the so-called government-sponsored enterprises given their role in helping alleviate the housing crunch, Shelby doesn't seem to be budging.

The canceled mark up was also supposed to see a vote on Dodd's measure to expand the Federal Housing Administration's insurance program to help distressed homeowners refinance into affordable mortgages. Dodd's bill is a companion to legislation sponsored by House Financial Services Chairman Barney Frank (D-Mass.), which his panel approved yesterday. Ten Republicans supported the measure.

House leadership is likely to add Frank's FHA bill into a larger housing package that would include the Fannie and Freddie overhaul. Getting the Senate Banking panel to report out its own Fannie-Freddie bill and FHA insurance expansion would be helpful from a procedural standpoint should the House, as expected, pass its housing bundle and send it straight to the Senate floor.

While Shelby remains a major obstacle in the way of Frank's grand plan to get such a package to President Bush's desk by July 4, some lobbyists say that GOP leadership will eventually over rule his objections in order to get a deal done and show voters back home that they're responding to the housing and foreclosure crisis.