694 pages – 19 hours (available before debate)
Throughout 2008, there were many signs that the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, were in big trouble. The mortgage-backed securities marketed by Freddie and Fannie plunged in value, as millions of Americans defaulted on their home loans. On Friday, July 11, Fannie and Freddie lost nearly half of their stock market value. The following Sunday, then-Treasury Secretary Henry Paulson retreated from earlier statements that the institutions were sound and called on Congress to pass—and to do it quickly—a massive rescue package for the two companies.
Paulson saw an attractive vehicle for his rescue plan—a package of housing legislation meant to give homeowners direct relief that had been winding its way through Congress for months. The Democratic leadership in Congress was happy to comply with Paulson’s request, as President George Bush had previously threatened to veto the legislation over a provision giving $3.9 billion in grants to local governments, and the new administration request gave them leverage. The new version of the legislation, including the Fannie-Freddie bailout, was formally introduced in the House on July 23. The Congressional Budget Office estimated the cost to be some $25 billion.
The bill had been available just 19 hours when the House took it up. In the short debate that followed, several House Republicans raised their displeasure over the sped up process demanded by the administration. “Deciding this issue without hearings and within a one-week span with virtually no deliberation and no opportunity to amend is a surrender of congressional responsibility,” said Rep. Spencer Bachus. Complained Rep. Sam Johnson, “I’m all for finding commonsense housing relief for those in trouble, but we need to hold hearings and take a closer look at this proposal and the ramifications.” Despite these objections, the House approved the 694-page bill that same afternoon by a vote of 272 to 152. The Senate followed suit a few days later, and President George W. Bush signed the legislation on July 30.