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Why GOP's Fannie-Freddie Proposal Is Doomed

Combine that profligacy with the wave of Tea Party fervor, widespread concern about the deficit, anger about financial bailouts and economic difficulties, and Democrats' pussy-footing around Fannie and Freddie may not help their cause much.

As one presumable Baby Boomer commented on an earlier TheStreet story about Fannie and Freddie : "In my crowd of angry old white men...the subj ect of these two 'agencies' come ups quite often."

On that note, it's worth considering how Fannie and Freddie have affected the political trajectory of certain politicians, via campaign donations. While the two entities have been barred from donating since falling under government conservatorship in September 2008, the Center for Responsive politics performed an analysis of Fannie and Freddie's campaign donations over the previous decade.

Dodd topped the list, with $165,000, followed by Obama, with $126,000 -- a shocking amount, considering his brief stint in Congress vs. Dodd's more than a quarter century by that point.

Democrats received 57% of the Fannie and Freddie donations from 1989-2008, though the top 10 recipients were split evenly among Democrats and Republicans. Shelby, for instance, raked in $80,000 in total donations, ranking at No. 9, whereas Frank came in at No. 26, with $43,000. McCain got $25,000; Gregg didn't receive any funds. The Washington Times' conservative editorial page also points out some interesting connections between the GSEs and former officials from the Clinton and Obama administrations that may have bought some good will on Capitol Hill.

In any case, Republicans are charging full steam ahead with their agenda to derail Obama's reform overhaul. And for one shining moment, political motivation seems less important than the ultimate goal: meaningful reform to the terribly broken housing-finance system.

Democrats will likely argue that the housing market is too frail today and too important ultimately to have the government step away.

It's true that Fannie and Freddie must keep playing their current roles for the foreseeable future. Otherwise, the housing market's nascent recovery would fall to shreds. But the McCain-Shelby-Gregg plan provides ample time for a full recovery, even under the most bearish forecasts. And few would argue that the private market couldn't step in to fill Fannie and Freddie's shoes over a period of at least 12 years .

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