$25 billion price tag for Fannie, Freddie bailout The Bush administration's proposal to authorize the Treasury Department to purchase the debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks might cost taxpayers $25 billion over two years if exercised, the Congressional Budget Office estimates. But by merely granting the Treasury Department the authority to shore up the government-sponsored entities (GSEs) capital base, Congress might restore confidence in Fannie and Freddie enough to head off the need for a government bailout, CBO director Peter R. Orszag said in a letter to lawmakers. "CBO's estimate recognizes that there is a significant chance -- probably better than 50 percent -- that the proposed new authority for the Secretary would not be used before it expired at the end of December 2009," Orszag said. "If the proposal is enacted, private markets might be sufficiently reassured to provide the GSEs with adequate capital to continue ope...
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