WASHINGTON
President Bush urged Congress yesterday to act quickly on legislation to support Fannie Mae and Freddie Mac and stabilize the mortgage markets.
The two federally chartered companies play a "central role" in the nation's housing system, Bush said at a White House news conference.
"The first step is to make sure there is confidence and stability in the mortgage markets," the president said.
He also called on legislators to follow his lead and lift a moratorium on oil and gas drilling on the U.S. outer continental shelf, a move that is being resisted by the Democratic majorities in the House and Senate.
With six months left in his presidency, Bush is struggling to reinvigorate an economy battered by record oil prices and turmoil in the housing market. Two days earlier, his administration asked Congress for authority to buy equity stakes in Fannie Mae and Freddie Mac, which guarantee almost half of the $12 trillion in outstanding U.S. mortgages, and increase the government's credit lines to the companies.
Growth in the economy has been "slower than we would have liked, but it was growth nonetheless," Bush said. "We are going through a tough time."
The government is depending on Fannie Mae, created in 1938 as part of President Roosevelt's New Deal, and Freddie Mac, formed in 1970, to help revive the home-mortgage market amid the highest loan-delinquency rates in at least 29 years.
Bush said that Fannie Mae and Freddie Mac must remain shareholder-owned companies, because any federal help would be deemed "temporary assistance," through either debt or capital.
"Hopefully, these measures will instill the confidence in the people," Bush said. He said that there are no plans for the government to take over the two companies.
Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, said yesterday that he expects that the administration's rescue plan will be approved by early next week. But some Republicans are urging more study on the proposal.
Bush spoke as Federal Reserve Chairman Ben Bernanke was testifying before the Senate Banking Committee that the economy is facing "significant downside risks" to growth and the threat of higher inflation.
Economists forecast economic growth will slow to a 0.6 percent pace by the final three months of 2008, the weakest in six years, according to the median estimate in a monthly Bloomberg News survey.
Bush said he has no plans to offer a second economic stimulus package beyond the tax rebates that already have gone out to taxpayers. In Congress, House Speaker Nancy Pelosi said that Democrats are weighing efforts to revive the economy, including more spending for roads and other infrastructure, home-heating assistance for low-income families and aid to states.
To deal with rising energy costs Bush said he wants Congress to act quickly to remove a ban on offshore drilling. Bush said that those areas can be tapped without spoiling the environment.
"It seems like it makes sense to say to the world we are going to use new technologies to explore for oil and gas in the United States," Bush said. "There is no short-term solution."
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