Yesterday, nearly five years after President Barack Obama first assumed office, the U.S. Senate removed what has been described by some progressives as the "single largest obstacle to meaningful economic recovery" when it was finally allowed to vote for the confirmation of Rep. Mel Watt (D-NC) as the new Director of the Federal Housing Finance Agency (FHFA).
In a vote allowed by a recent change to filibuster rules in the U.S. Senate, Watt will now replace Bush appointee Edward J. DeMarco, who was first appointed in 2008 and became the acting Director of the federal agency in 2009.
The FHFA oversees the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, which collectively own 60% of all mortgages in the United States. The agency also oversees 12 Federal Home Loan Banks, which, according to the Washington Post, "serve as major sources of funding for hundreds of banks."
In a statement issued late yesterday, praising Watt's confirmation and chiding Senate Republicans for their obstructionism in holding up this and many other uncontroversial Presidential nominations, Rep. Xavier Becerra (D-CA), Chairman of the House Democratic Caucus, highlighted the importance of the FHFA's intended role in safe-guarding homeowners.
"Republicans in the U.S. Senate callously blocked the confirmation of the supremely qualified Congressman Mel Watt to be our nation's Director of the Federal Housing Finance Agency," Becerra said. "Today, by a bipartisan vote of 57 to 41, Rep. Watt is on his way to lead the FHFA as America's watchdog over the American Dream. What a difference a day makes when the Senate is free of the mischief of exploitive filibusters"...
The long-awaited up-or-down majority vote on Watt in the U.S. Senate comes in the wake of the change in the filibuster rules by the U.S. Senate Democratic majority just before the Thanksgiving recess last month. That change --- which ends the use of the filibuster for Executive appointees and non-Supreme Court jurists --- also allowed Democrats to approve two new D.C. Circuit Court of Appeal judges by a majority vote on Tuesday after Republicans had been blocking them for, literally, no reason at all other than they didn't want to allow this President of the United States to seat any of his own nominees to that court.
Watt finally replaces DeMarco, who, according to Nobel Prize winning economist Paul Krugman, has steadfastly defied the Obama Administration's effort to secure debt relief for the underwater homeowner victims of the 2008 collapse of the Wall Street casino, even after the U.S. Treasury Department offered to "pay up to 63 cents to the FHFA for every dollar of debt forgiven."
Sens. Richard Burr (R-NC) and Rob Portman (R-OH) joined Senate Democrats in voting to approve Watt's nomination.
University of Richmond Law Professor Carl Tobias offered up an historical context for the unprecedented Republican abuse of the filibuster that had kept DeMarco in office these past five years. He notes that if the Senate had not invoked what we described as the "democracy option," (others referred to it as the "nuclear option"), Watt would likely have been the first active member of Congress to be rejected for such a position since 1843.
But with confirmation comes responsibility. Watt, who avoided committing to a specific position on principal reduction when he testified before the Senate Banking Committee, will now have to both face that issue and decide whether he will reverse DeMarco's heavy-handed instruction to Fannie and Freddie, directing the two mortgage giants to "'limit, restrict or cease business activities' in any jurisdiction" that elects to use eminent domain as a debt relief tool.