The Obama administration will not make its Jan. 31st deadline for proposing reforms to the GSEs, an administration official said Monday.
The official, who spoke on the condition of anonymity, said scheduling had become an issue for releasing the plan this month, and the Treasury Department was now eyeing next month.
"We should have a report to Congress by mid-February," the official said. "January is a busy time with the budget and the State of the Union; we just need a little bit more time to get this together."
The announcement marked the third time the administration has missed a stated deadline for proposing GSE changes to Congress, raising further doubts that the White House has settled on a plan.
One critical decision is whether the administration will release a concrete proposal for reforming Fannie Mae and Freddie Mac or simply lay out a compilation of different approaches the government could take.
"The delay in releasing the report suggests there may be a debate within the administration about whether to propose a specific plan or rather to summarize options," said William Longbrake, an executive-in-residence at the University of Maryland. "The latter approach seems increasingly likely."
Some observers said officials may just be demonstrating extra caution and exhausting all ideas before committing to a plan.
"The issue of how to address Freddie and Fannie — as well as the other GSEs — requires a delicate balancing act by the administration," said Gil Schwartz, a partner in Schwartz & Ballen. "They have to make certain that they have addressed all of the concerns raised by the various constituencies and come up with a plan that they can defend as well as enact into law."
The administration had first promised a plan would be out in 2009, but then pushed it to the next year. After the second delay, lawmakers including a provision in the Dodd-Frank Act requiring the White House to release its report.
"I am hardly surprised about the delay — I have been predicting just such a delay for some time," said Bert Ely, an independent analyst based in Alexandria, Va. "In fact, I will be surprised if the administration published a proposal in two or three weeks — it will be interesting to see what time-frame commitment they make."
In the recently divided Congress, choosing to lay out various options would give the administration the benefit of having advanced the GSE debate, without meeting what is a political prickly issue directly. At the heart of the debate is an ideological dispute over the extent of government involvement in the housing market.
Many Republicans would rather see a plan to abolish Fannie and Freddie than endorse any plan by Democrats to maintain even the slightest government guarantee.
"It's a very difficult task, in particular because of that, which is exacerbated by the new composition of the House and Senate," said Schwartz. "They will release the proposal when they feel comfortable with the result."
Ely agreed.
"The White House knows that whatever they propose will differ significantly from whatever Fannie and Freddie bill the House Republicans send to the Senate," he said. "So in some ways, Fannie and Freddie reform is a lose-lose proposition politically for the White House. The key overall reform issue is housing-finance reform, which opens up not only one, but several big cans of very ugly political worms."
