The Capitol

WASHINGTON, DC—Well, now, this is interesting. After an earlier delay, reportedly to gain broader support so that Senate Majority Leader Harry Reid will have to let the legislation come up on the Senate floor, the Senate Banking Committee plans to vote on the housing-finance reform bill introduced in March by Tim Johnson, D-SD and Mike Crapo, R-Idaho, next week.

But in the interim they, and we, can chew on the latest projections about the deficit from the Congressional Budget Office. On Wednesday it reported that federal government ran a budget deficit of $301 billion for the first seven months of fiscal year 2014, CBO estimates—$187 billion less than the shortfall recorded in the same span last year. Revenues were about 8% higher and outlays about 3% lower.

Outlays declined for several major programs or categories of spending, according to CBO’s estimates, including because payments from Fannie Mae and Freddie Mac to the Treasury were $42 billion more than they were last year. (emphasis mine)

CBO gives two reasons for the increase. One, because of a revaluation of certain tax assets that significantly increased its net worth, Freddie Mac made a onetime payment of $24 billion to the Treasury in December 2013. The second reason, it said, was because both Fannie Mae and Freddie Mac were profitable in 2013, they were required to make quarterly payments–$33 billion through March 2014–to the Treasury in amounts related to the increase in their net worth beginning in January 2013.

This is the latest, but hardly only or last, data point that will be considered as the debate over housing-finance reform gets underway.

Here is another: last week, the Federal Housing Finance Agency reported that according to its stress test of the GSEs, now required under Dodd-Frank, Fannie and Freddie could require anywhere from $84.4 billion to $190 billion in additional taxpayer aid if the economy suffers a severe downturn. The amount would depend on certain accounting assumption and the depth of the downturn.

Fannie Mae and Freddie Mac received approximately $187.5 billion in bailout funds. They have since returned $202.9 billion in dividends to the Treasury.

Finally there is this number to consider: 47, as in $47 per share. That is what Fannie Mae could be worth in time, according to Bill Ackman, head of Pershing Square Capital Management LP, when speaking at the 19th annual Sohn Investment Conference in New York City.