STEVE INSKEEP, Host:
It's MORNING EDITION from NPR News. Good morning. I'm Steve Inskeep.
DEBORAH AMOS, Host:
But they have suffered big losses, and there's concern that Mac and Mae might need more capital. NPR's Jim Zarroli reports.
JIM ZARROLI: Treasury Secretary Henry Paulson said Fannie Mae and Freddie Mac play a critical role in the housing market.
HENRY PAULSON: Their support for the housing market is particularly important as we work through the current housing correction.
ZARROLI: Banking consultant Bert Ely says that Fannie Mae and Freddie Mac typically hold huge amounts of debt.
BERT ELY: Keep in mind that as of March 31, the two companies combined had over $500 billion of short-term debt outstanding. That's a huge amount of money that they have to keep rolling over. It works out to, you know, an average of 40 or $50 billion a month.
ZARROLI: Burt Ely noted that Congress is already working on legislation to beef up regulatory oversight of the firms. And Ely said the bailout plan can only make it tougher to reach agreement.
ELY: So, it raises lots of questions, and they would be questions in any circumstance, but these are complicating questions that get fed into an already complicated piece of legislation.
ZARROLI: Vince Reinhardt, an economist with the American Enterprise Institute, agrees. He says there are big questions about how the bailout will work. For instance, if the Treasury Department is allowed to buy Fannie Mae's stock, will its shares be just like anyone else's? Or will they have some kind of preferred status? And Reinhardt says as long as those questions are unanswered, investors may be reluctant to come on board.
VINCE REINHARDT: The endgame hasn't been spelled out. Exactly how will they get capital injected? What will the treatment of other creditors be? And those uncertainties, until there's a final resolution, will weigh on investors' decisions.
ZARROLI: Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.