What to look for: Budget 2018

Accompanying every administration’s budget each year is a supplement titled, “Analytical Perspectives” which provides additional detail to support the overall budget.

The Obama 2017 Analytical Perspectives can be found here.

There are numerous references to Fannie Mae and Freddie Mac in the 2017 document including the following passage:

Future of the GSEs To finish addressing the weaknesses exposed by the financial crisis, the housing finance system must be reformed, and Fannie Mae and Freddie Mac should be wound down. The bipartisan progress in the Senate in the previous session was a meaningful step towards securing a system that aligns with many of the Administration’s principles for reform, including ensuring that private capital is at the center of the housing finance system so that taxpayer assistance is never again required, and that the new system supports broad access to credit and affordable rental housing through programs like the Housing Trust and Capital Magnet Funds.

Further, the Consolidated Appropriations Act, 2016, included a provision that prohibits Treasury from selling or otherwise disposing of the preferred stock it holds in Fannie Mae or Freddie Mac until January 1, 2018, unless legislation instructing Treasury on how to do so is enacted into law. Further, this provision recommends that legislation regarding the future of Fannie Mae and Freddie Mac be enacted and, notwithstanding the previous limitation, suggests that Treasury should not sell or dispose of its stock until such legislation is enacted.

The Administration will continue to work with Congress to pass comprehensive reform, centered on several core principles: require more private capital in the system; end the Fannie Mae/Freddie Mac duopoly business model in order to improve system stability and better protect taxpayers; ensure broad access for all creditworthy families to sustainable products like the 30-year fixed rate mortgage in good times and bad; and help ensure sustainable rental options are widely available.

The above language was repeated for years throughout the Obama Administration. However, the Trump Administration has indicated many times that it will take a different approach to Fannie and Freddie vs. the previous administration.

The 2018 Analytical Perspectives is likely being drafted as we speak and is due out in May. In President Obama’s first term, the Fiscal 2010 Analytical Perspectives was published May 11, 2009. In subsequent administrative years the documents are published in February due to the team already in place.

Therefore, we should look forward to receiving Trump’s 2018 Analytical Perspectives this May. That document should provide the Administration’s intentions regarding how they plan to deal with Fannie and Freddie, if they have not already provided detail ahead of this publication.

 

 

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5 thoughts on “What to look for: Budget 2018

  1. BHO was more interested in social reform than jobs and economy because he did not have any experience in business or economy. BHO mainly focused on minorities and poor.

    BHO relied on WS elites to manage the economy and they did very well for themselves. So only Rich, minorities and poor did well and middle class got wiped out.

    Liked by 1 person

    • There are many, many examples of Obama acting as if his Administration was above the law, but few as crystal clear — as you state — as the lies and malfeasance in Fanniegate.

      “We’re from the Obama Administration and we’re here to help…”

      Liked by 1 person

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