Sen. Shelby: Oversight Key In Fannie-Freddie Plan

The Bush administration has been pressing Congress to sign off on a rescue plan for the mortgage finance companies Fannie Mae and Freddie Mac. Some lawmakers are critical of the effort to prop up the two companies.

Republican Sen. Richard Shelby of Alabama, the ranking member of the Senate Banking Committee, talks with Deborah Amos about the plan.

"This might be an approach that will work, it might not be, but it will probably bring some type of confidence back to the market that we're not going to let Fannie Mae and Freddie Mac go under," Shelby says.

What he needs to see in the rescue package to support it, he says, is the creation of a strong independent regulator over Fannie Mae and Freddie Mac to shore up their capital and make sure they're well-managed, as well as assurance from the Treasury Department, the Bush administration and the Federal Reserve that the plan is "of the utmost importance" and that it will be temporary in nature.

"We have a financial powder keg, and we do not want to light the fuse," he says.