Congress may not be in session, but that hasn’t stopped Democratic leaders from convening hearings that highlight a staggering economy that is expected to pay dividends for them in the November elections.
Rep. Henry A. Waxman of California, chairman of the House Oversight and Government Reform Committee, held two hearings this week intended to investigate the “causes and effects” of the financial crisis on Wall Street and has scheduled three more hearings leading up to Election Day.
But Republicans are angered that mortgage lenders Fannie Mae and Freddie Mac, whose questionable lending practices led to a government bailout last month, aren’t even being addressed.
The two companies guarantee or own millions of mortgages issued to low-income families — a key Democratic voting bloc.
“If Congress chooses to selectively examine the causes of this crisis by excluding the role that Fannie Mae and Freddie Mac played, then this week´s hearings will not be viewed as a serious effort, but rather a political charade,” said Antonia Ferrier, a spokeswoman for House Minority Whip Roy Blunt, Missouri Republican.
This week, Mr. Waxman chose to hold hearings on the failures of insurance giant American International Group (AIG) and Wall Street investment bank Lehman Brothers.
Polls show that voters trust Democrats over Republicans to handle the nation’s economy. Sen. Barack Obama, the Democratic presidential candidate, appears to have benefited with strong surges in several swing-state polls and national polling.
Sixty-eight percent of voters are confident in Mr. Obama’s ability to handle the financial crisis, 18 points ahead of his Republican rival, Sen. John McCain, and 42 points ahead of President Bush, a Monday CNN/Opinion Research Corporation poll showed.
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Democrats dismiss Republican accusations that they have ignored problems with Fannie Mae and Freddie Mac, saying the House under their leadership already passed reforms needed to oversee the mortgage giants, and that Republicans did nothing to reform the lenders when they controlled the House from 1995 to 2007.
“Oversight is a primary responsibility of the Congress,” said Drew Hammill, a spokesman for House Speaker Nancy Pelosi, California Democrat. “Chairman Waxman’s exemplary work will guide members on both sides of the aisle as Congress moves forward on reform.”
The party in power historically has used the oversight committee against the minority party. Between 1997 and 2002, when Republicans controlled the House, the committee issued more than 1,000 subpoenas against the Clinton administration and the Democratic Party.
And Mr. Waxman is viewed by the right as no different.
Since taking control of Congress, the White House says Democrats have started nearly 700 investigations and held more than 1,300 oversight hearings.
Rep. Brian P. Bilbray, California Republican and member of the oversight committee, has urged House Financial Services Committee Chairman Barney Frank, Massachusetts Democrat, to immediately hold hearings on Fannie Mae and Freddie Mac’s troubles.
“While the hearings we are holding in the [oversight committee] are instructive, we lack the jurisdiction to propose a package of reforms that are so clearly needed to address the failures of the market,” wrote Mr. Bilbray in a letter sent Wednesday to Mr. Frank and Mrs. Pelosi.
A report on the causes of the financial crisis by Rep. Thomas M. Davis III of Virginia, the ranking Republican on the oversight committee, was released this week and called Fannie Mae and Freddie Mac “the central cancer of the mortgage market, which has now metastasized into the current financial crisis.”
Mr. Waxman has promised future hearings on Freddie Mae and Fannie Mac, although his office has said it’s unlikely they will be scheduled before next month’s elections.
Democrats say a Sept. 25 House Financial Services Committee hearing already addressed the problems leading up to Fannie Mae and Freddie Mac’s demise.
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