In light of recent legislation and testimony regarding the activities of the government-sponsored enterprises (MBSL 2/7/00, 3/6/00, 3/27/00), more members of Congress are stepping up to call for further review of the GSEs.

Senator Phil Gramm, (R., Texas), chair of the Senate banking committee, has stated he will take a "top-to-bottom" review of the GSEs, to determine if restrictions to be placed on them in the legislation is necessary.

Like many other followers of the bill, Gramm also questioned whether such legislation could be enacted in an election year.

Hearings on the GSEs are likely to begin sometime this summer. Close attention will be given to the Federal Home Loan Bank System's loan borrowings that exceed the U.S. Treasury, and the implicit government guarantee associated with Fannie Mae- and Freddie Mac-issued securities.

Elsewhere in Congress, U.S. Rep. Peter Hoekstra, (R., Mich.), a member of the House budget committee, plans to examine the increase in GSE debt issuance. He is concerned that with the Treasury's debt reduction, GSE debt could emerge as the benchmark bond.

Hoekstra has asked the chair of the budget committee to allow him to use the task force he heads to follow the issue. He has also written a generic letter to spark more interest in his cause.

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