Paulson's GOP headache.

Position:OFF THE NEWS - Grand Old Party - Brief article

Washington insiders are keeping their fingers crossed that the credit risk associated with the GSEs Fannie Mae and Freddie Mac does not intensify. Early on in the subprime crisis, U.S. policymakers thought some form of bailout or capital replenishment of these institutions might be the solution to stabilizing the mortgage crisis. As the crisis unfolded, however, Fannie and Freddie became no longer the solution but institutions at the heart of the problem.

That brings up a delicate political dilemma for the major players in Washington. Republicans in the Senate acknowledge the likelihood that Fannie Mae and Freddie Mac may eventually require legislation offering some sort of bailout. However, key GOP Senate leaders say the reason a bipartisan effort is unlikely relates not to an unwillingness to work with their Senate Democratic colleagues, but to an...

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