Govt considering folding lenders' debt into budget

The Bush administration is considering how to fold Fannie Mae and Freddie Mac's $5.2 trillion in debt into the federal budget, the White House budget office and the US Treasury Department said.

"We're discussing how to present this in the federal budget with Treasury and stakeholders right now, but a conclusion hasn't been determined," said Corinne Hirsch, a spokeswoman for the Office of Management and Budget. The Government Accounting Office and other federal agencies are also weighing in on the issue.

The federal takeover of the government-sponsored enterprises, or GSEs, on Sept 7 failed to address whether the debt of Fannie and Freddie should be included in the budget, or whether it carries an explicit government guarantee. In an interview this week, Treasury Secretary Henry Paulson cited the "incongruities" in the law and said "we should be clear, is there a government guarantee or isn't there?"