Senate GOP Blocks Rep. Mel Watt's Nomination To Head Federal Housing Finance Agency

11:53 AM, Oct 31, 2013   |    comments
President Barack Obama nominated Rep. Mel Watt, D-N.C., in May to be the next director of the Federal Housing Finance Agency. (Photo: Mark Wilson Getty Images)
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WASHINGTON -- Senate Republicans blocked the nomination of Rep. Mel Watt, D-N.C. to head the Federal Housing Finance Agency to oversee mortgage lenders Fannie Mae and Freddie Mac at a critical time for the industry.

Democrats fell three votes shy of the 60 required to advance his nomination.

President Obama nominated the North Carolina Democrat in May to replace acting FHFA director Edward DeMarco. Thursday's filibuster marked the first time since the Civil War that a sitting member of Congress was denied a presidential nomination by the Senate.

Senate Republicans opposed Watt's nomination because they prefer the policies advanced by DeMarco, who has been targeted by liberal Democrats and activists for not doing more to advance policies to aid homeowners facing foreclosure.

Republicans counter that DeMarco saved taxpayers more money. Watt opponents said they feared the 11-term congressman would advance more costly policies. "I think this is the wrong job for this good man," said Sen. Pat Toomey, R-Pa., who supported the GOP filibuster, citing the far reaching authority granted the FHFA director. "There is no parallel in our country for an institution where so much power is concentrated in one person."

Toomey also questioned Watt's credentials, citing a previous comment made by Watt in which he said he didn't understand derivatives, a controversial financial instrument. Toomey also said Watt supported the policies that "helped drive Fannie and Freddie into the conservatorship that cost taxpayers so much money."

Watt is a veteran member of the House Financial Services Committee and Democrats hailed his credentials. "Mel Watt is the right man for the job," said Sen. Elizabeth Warren, D-Mass., "When it comes to housing, Congressman Watt has seen it all, and Congressman Watt has shown good judgement throughout it all." Watt's nomination was also supported by civil rights groups.

However, the nomination was also dragged down by a brewing internal political fight over all presidential nominees. Senate Majority Leader Harry Reid, D-Nev., has warned Republicans that he might again try to advance a controversial procedural rules change to confirm presidential appointees with 51 votes instead of 60 votes.

Republicans say that doing so would tear the institution apart, which is why is it informally called the "nuclear option."

"We will destroy the very fabric of the United States Senate and that is is that it requires a larger than numerical majority in order to govern," said Sen. John McCain, R-Ariz., who opposed the Watt nomination in protest of Reid's threat to change the rules.

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