WASHINGTON -- Congress wants to require executives at Fannie Mae and Freddie Mac to have their pay packages approved by the government as part of a bill to throw a federal lifeline to the mortgage giants.
The idea comes as lawmakers scramble to limit the potential taxpayer costs of the rescue plan and satisfy critics of the government-sponsored companies who fear an open-ended bailout.
Rep. Barney Frank, chairman of the House Financial Services Committee, also wants to mandate that the companies delay issuing dividends until they reimburse the government, if the Treasury Department had to prop them up.
Frank, D-Mass., said Thursday the House plans to count any rescue effort under the overall $9.8 trillion statutory limit on the national debt. That approach is intended to answer charges that the aid amounts to a blank check.
"The fact that any expenditure under this bill would be subject to the debt limit is a cap, in effect, on the amount that you could put here. That invalidates these claims," Frank said.
"I'm optimistic that we will be able to send (the Bush administration) something that they will be able to accept," Frank said.
Frank met with Sen. Christopher Dodd, D-Conn, the Senate Banking Committee chairman, to work out details, and later met with Treasury Secretary Henry Paulson on the plan.
Paulson said he was confident "that we will come to a very acceptable result" on the proposal.
The Treasury chief is lobbying Congress for quick approval of his plan to temporarily empower the government to extend unlimited lines of credit to Fannie Mae and Freddie Mac and buy their stock. The Federal Reserve has offered to let the companies draw emergency loans.
The companies' shares have plummeted because of fears about their financial stability. Fannie Mae and Freddie Mac are private, but they were created by Congress to encourage homeownership by buying mortgages from banks. The two hold or guarantee more than $5 trillion in home loans -- almost half of the nation's total.
The House plans a vote next Wednesday on a housing bill expected to include the help for Fannie Mae and Freddie Mac. President Bush has threatened a veto unless there are changes, but now is pressing to add the mortgage rescue as part of a broad compromise.