According to the Treasury, the White House will present a proposal for the reform of Fannie Mae and Freddie Mac to Congress by January 2011:

[Yesterday], the Obama Administration announced expanded opportunities for public engagement on the future of our nation’s housing finance system, including Fannie Mae and Freddie Mac. These events, which will include a major conference in Washington, D.C., will help provide critical public input as the Administration continues its work developing a comprehensive housing finance reform proposal for delivery to Congress by January 2011.

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The main selling point of the $787 billion American Recovery and Reinvestment Act of 2009, a.k.a. the stimulus package, was that it would be “targeted, timely, and temporary.” While much debate has ensued over whether the stimulus package has met any of those goals to date, some lawmakers want to add another $88 billion to it:

A disparate collection of lawmakers and special interests is pushing to extend tax credits and other benefits — effectively proposing another economic stimulus with a price tag of at least $88 billion.

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The Senate’s latest attempt to let judges arbitrarily change the term of mortgages for homeowners who have declared bankruptcy went down to defeat as expected yesterday:

For the second time in two years, a provision to allow bankruptcy judges to modify mortgages died in the Senate today, handing the Obama administration a significant defeat in its plans for arresting the foreclosure crisis.

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It’s been a chaotic week of outrage and finger-pointing over the AIG bonuses. Depending upon your view, the bonuses — which were put in place last year and known to the Obama administration since at least early March, if not earlier — are either a necessary evil to keep the employees who know how to unravel the Gordian knot that other, long-gone employees put into place…

The handful of souls who championed the firm’s now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, the majority of whom never lost a dime for AIG, now feel they have been sold out by their Congress and their president. …

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Congress is still plugging away at a cramdown bill that would let federal judges shave the mortgage balance, lengthen the loan’s term, or cut its rate — or a combination thereof — of homeowners who have declared bankruptcy.

The bill known officially as “Helping Families Save Their Home Act” passed the House this week, but only after modifications that would put more of the burden on homeowners to prove they needed it:

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President Bush agreed this morning to seek the second half of the TARP funds for President-elect Obama. Once President Bush officially requests the remaining $350 billion, Congress will have 15 days to decide whether or not to release the cash. New spending strategies are expected to accompany the money if Congress votes in favor of releasing it. While the Treasury Department diverged from the TARP’s original approach, it may evolve even more under the new administration:

…Obama and his fellow Democrats want more of the money to go directly to consumers struggling with a wave of home foreclosures and stricter limits to be imposed on those who receive the aid.

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Under an ethics law passed 1989, members of Congress are in line to receive an automatic pay hike every year. A lot of people don’t think they deserve it this time around:

A crumbling economy, more than 2 million constituents who have lost their jobs this year, and congressional demands of CEOs to work for free did not convince lawmakers to freeze their own pay.

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We’ve seen the structure of bailouts change before to better equip preconceived objectives, yet, the American-auto industry’s bailout seems to have shifted in the wrong direction. Lawmakers are said to be focusing on a  bailout draft that would offer the Big Three $15 billion. Last week GM, Ford, and Chrysler asked for a combined $34 billion. Why are lawmakers choosing to apply a band-aid over a problem that requires so much more?:

Even if all the parties are able to work out a deal for short-term aid, GM and Chrysler will still have to come back to Washington after Mr. Obama and the new Congress take office. GM has asked for a total of $18 billion in government loans and Chrysler $7 billion. Both companies together have applied for more than $10 billion in additional loans through the Energy Department program to help them improve fuel efficiency.

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It’s easy to become cynical when the American automakers returned to Washington with an even bigger hat in hand, explaining it would now cost taxpayers $34 billion to save their companies — instead of the $25 billion discussed some two weeks ago. At this juncture we all understand what’s at stake if the three go under, but whether or not lawmakers and auto execs can agree on how to best save the companies and the American auto industry — and, oh yeah, we taxpayers — is another can of worms altogether.

After the Big Three (I’m curious to how much longer we will be calling them the “Big” Three) submitted their plans for “viability,” they revealed that General Motors is now seeking $18 billion, and Chrysler $7 billion, while Ford seeks a $9 billion line of credit. Chrysler says they need the $7 billion before December 31, and GM says they’ll need at least $4 billion immediately to cover costs. Ford seems to be in the best shape, reiterating in yesterday’s press release that they hope “to complete its transformation without accessing the loan should Congress agree to make the funds available.” Ford says they plan to become profitable or at least break-even by 2011.

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Today is the day CEOs from the Big Three will hand over their plans to Congress that are expected to layout their “path to viability.” Top execs from GM, Ford, and Chrysler were sent back to Detroit with their tails between their legs, after U.S. lawmakers rejected their pleas for government funding. After today’s submission of their “battle plans,” the CEOs are slated to meet with Congress in two separate sessions Thursday and Friday. Some expect a Congressional vote as early as next week.

The promises each automaker has proposed has yet to be seen, but CNBC’s Phil LeBeau, author of the blog Behind the Wheel, bets the reactions will be mixed: Read the rest of this entry »