Cloudy Future for Fannie and Freddie

The Treasury secretary, Timothy F. Geithner, has pledged to propose “detailed reforms” this year. Democrats and Republicans in Congress are scheduling hearings. Politicians from both parties have demanded the eradication of Fannie Mae and Freddie Mac.

But for now, the only real consensus is that no one quite knows what to do with the companies. Whatever happens is almost certain to determine which Americans can — and cannot — get mortgages, and how much those loans will cost. That, in turn, will most likely influence home values for decades.

And so, despite talk of dislodging political gridlock in Washington, many policy makers seem happy to put off making any real decisions. Many policy makers concede that there are no easy options. Trying to reinvent Fannie Mae and Freddie Mac, they say, could push the housing market into even more dire straits.

“I’ve said we should abolish Fannie Mae and Freddie Mac in their current form and come up with a whole new system of housing finance,” said Representative Barney Frank, a Massachusetts Democrat and the chairman of the House Financial Services Committee. “I can’t say when. And I don’t have any idea what that new system will look like. No one, I believe, knows. All we really know is that we need something new.”

Indeed, most of the recent enthusiasm for public discussions about Fannie and Freddie have been attempts by both parties to gain political advantage. Aides to high-ranking Republican and Democratic lawmakers say that opinion polls suggest that independent voters are unlikely to support candidates who defend Fannie and Freddie.

Republicans are trying to emphasize the companies’ longtime Democratic ties. They attacked the Treasury Department in December when the government announced multimillion-dollar pay packages for the companies’ top executives.

“Awarding millions of dollars in bonuses on the taxpayers’ dime is unconscionable,” Representative Jeb Hensarling, Republican of Texas, wrote to the Treasury secretary in a letter signed by 70 Republicans.

On Monday, after the White House announced it did not yet have a firm plan for the companies, Representative Spencer Bachus, Republican of Alabama, said, “It is irresponsible for the administration to give Fannie and Freddie a blank check and offer no strategy for reforming the G.S.E.’s.”

To counter such salvos, Democratic lawmakers are now searching for opportunities to publicly distance themselves from Fannie and Freddie.

“We’re going to provide a lot of chances for Democrats to vote against Fannie and Freddie and to openly criticize them,” said a Congressional staff member working for a high-ranking Democrat. “Everyone is going to get a chance to say something bad about the companies if they want to, and we’re going to make sure the volume is up on the microphone.”

The White House, already under attack for mounting debts, has so far disregarded advice from the Congressional Budget Office to fold the costs associated with Fannie and Freddie into the budget. In Monday’s statement, the administration emphasized that because Fannie and Freddie may one day come out from under government control, they should stay off the books.

Meantime, everyone is waiting for the big fix.

“No one has come up with a new model that can both maintain liquidity and eliminate all the bad or conflicting incentives that caused the crisis in the first place,” said Thomas A. Lawler, an economist who worked at Fannie Mae for more than two decades before leaving in 2006 to become a consultant. “And the longer the government relies on entities like Fannie and Freddie to implement the recovery, the harder it is to get rid of them. This is a really, really hard problem, and it’s going to take a long time to figure out the right solution.”