Replies to post #155823 on Fannie Mae-No Politics (FNMA)

[obiterdictum]

Senate gone nuclear ups chances for Watt to lead FHFA and loan limits to be frozen

Ruth Mantell
November 21, 2013, 3:08 PM

http://blogs.marketwatch.com/capitolreport/2013/11/21/senate-gone-nuclear-ups-chances-for-watt-to-lead-fhfa-and-loan-limits-to-be-frozen/

The Senate’s decision on Thursday to allow simple majority votes on whether to proceed with executive and judicial nominees raises the likelihood that the president’s previously blocked pick to lead the Federal Housing Finance Agency will finally succeed.

Last month Rep. Mel Watt, a North Carolina Democrat, failed a test vote to advance his nomination to become the new chief of Fannie Mae and Freddie Mac’s regulator. At that time, moving forward with Watt’s nomination received only 56 “yes” votes, four short of the 60 needed. On Thursday the Senate approved the “nuclear option” by reversing long-standing rules calling for a 60-vote threshold.

Leading the FHFA is a prominent position as the housing market rebounds and Congress deliberates over housing-finance reform. Getting Watt to head the FHFA would be a big win for the White House because Watt, unlike the FHFA’s current acting chief, is amenable to a proposal from the administration to direct Fannie FNMA and Freddie FMCC to allow principal reductions for troubled mortgages.

But that’s not all. Watt at the helm of FHFA would likely mean, according to a research note from Keefe, Bruyette & Woods analysts Brian Gardiner and Michael Michaud:

–FHFA would scrap plans to reduce conforming loan limits.

–FHFA would walk away from possible additional cuts to Fannie and Freddie’s multi-family business.

Just as important, here’s what KBW analysts say wouldn’t change:

–There would still be slim chances for approval of plans from the private sector to spin off Fannie and Freddie.

–Fannie and Freddie would still increase the fees that they charge lenders to guarantee the payment of principal and interest on mortgage-backed securities.

–The U.S. Treasury Department would remain the senior preferred shareholder in Fannie and Freddie, and still receive their profits.

–Ruth Mantell

[955]

60 votes required for cloture. Senate rules do not obviate cloture. SEE EXAMPLE BELOW HIGHLIGHTED IN RED.

In 1975, the Senate reduced the number of votes required for cloture from two-thirds to three-fifths, or 60 of the current one hundred senators.

From Senate.gov website:

Filibuster and Cloture

Using the filibuster to delay or block legislative action has a long history. The term filibuster -- from a Dutch word meaning "pirate" -- became popular in the 1850s, when it was applied to efforts to hold the Senate floor in order to prevent a vote on a bill.

In the early years of Congress, representatives as well as senators could filibuster. As the House of Representatives grew in numbers, however, revisions to the House rules limited debate. In the smaller Senate, unlimited debate continued on the grounds that any senator should have the right to speak as long as necessary on any issue.

In 1841, when the Democratic minority hoped to block a bank bill promoted by Kentucky Senator Henry Clay, he threatened to change Senate rules to allow the majority to close debate. Missouri Senator Thomas Hart Benton rebuked Clay for trying to stifle the Senate's right to unlimited debate.

Three quarters of a century later, in 1917, senators adopted a rule (Rule 22), at the urging of President Woodrow Wilson, that allowed the Senate to end a debate with a two-thirds majority vote, a device known as "cloture." The new Senate rule was first put to the test in 1919, when the Senate invoked cloture to end a filibuster against the Treaty of Versailles. Even with the new cloture rule, filibusters remained an effective means to block legislation, since a two-thirds vote is difficult to obtain. Over the next five decades, the Senate occasionally tried to invoke cloture, but usually failed to gain the necessary two-thirds vote. Filibusters were particularly useful to Southern senators who sought to block civil rights legislation, including anti-lynching legislation, until cloture was invoked after a 60 day filibuster against the Civil Right Act of 1964. In 1975, the Senate reduced the number of votes required for cloture from two-thirds to three-fifths, or 60 of the current one hundred senators.

Many Americans are familiar with the filibuster conducted by Jimmy Stewart, playing Senator Jefferson Smith in Frank Capra's film Mr. Smith Goes to Washington, but there have been some famous filibusters in the real-life Senate as well. During the 1930s, Senator Huey P. Long effectively used the filibuster against bills that he thought favored the rich over the poor. The Louisiana senator frustrated his colleagues while entertaining spectators with his recitations of Shakespeare and his reading of recipes for "pot-likkers." Long once held the Senate floor for 15 hours. The record for the longest individual speech goes to South Carolina's J. Strom Thurmond who filibustered for 24 hours and 18 minutes against the Civil Rights Act of 1957.

https://www.senate.gov/artandhistory/history/common/briefing/Filibuster_Cloture.htm