In May, the Congressional Budget Office issued a new report on the size of the Fannie Mae and Freddie Mac subsidy, estimating that in 2000 these two government-sponsored enterprises received an implicit government backing of $10.6 billion. This was an increase of more than 50 percent from five years before. In response to the CBO report, Freddie Mac commissioned a study by James C. Miller, a former Reagan Office of Management and Budget director, and James E. Pearce, an economic consultant. The Miller-Pearce study is highly critical of the CBO report and its methodology. It argues, among other things, that Fannie and Freddie confer benefits on the housing finance market that exceed the size of their implicit subsidy.

Dan L. Crippen, director of the CBO, will review the Miller-Pearce study and present the CBO’s response.