Three reasons Mel Watt's nomination was blocked in the Senate

by Adam O'Daniel, Charlotte Business Journal, November 1, 2013.

U.S. Rep. Mel Watt's bid to become the next director of the Federal Housing Finance Agency was dealt a major blow Thursday when Republicans in the U.S. Senate blocked his confirmation.

Watt, a Charlotte Democrat, was nominated by President Obama in the spring to lead the office that overseesFannie Mae and Freddie Mac. He is a veteran lawmaker and a Yale-educated lawyer.

The failed confirmation bid is the first time since the Civil War that a sitting member of Congress did not pass muster in the Senate.

What happened? Here are three reasons why Watt's confirmation has been roadblocked:

1. Watt's stance on housing policydiffers greatly from the approach favored by conservative Republicans. Watt has advocated for more access to affordable housing through government programs and federal policies that make the path to homeownership easier for working-class Americans. He has also been criticized by opponents for lacking deep knowledge of the housing industry, though that seems trumped up, considering his long political rйsumй and background as a real estate lawyer.

Republicans, and many American voters, in the aftermath of the subprime mortgage crisis are pushing for major reforms to the housing system. They want less government involvement and more private-sector investment in the market. Right now, a large majority of home loans are purchased from lenders by government-backed Fannie and Freddie. To usher private investors back in, policy changes would likely lead to larger down payments and higher credit score requirements. Watt's voting record advocates for the opposite.

Acting FHFA Director Edward DeMarco has taken a more conservative stance in overseeing Fannie and Freddie, opposing principal write-downs, for underwater borrowers, and conservative lawmakers would rather keep that influence in place.

2. The numbers don't add up for Watt. Democrats have majority control of the U.S. Senate. And most would support Watt's nomination. But today's procedural vote needed 60 votes to carry. It received only 56, with just two Republicans voting for Watt, Sen.Richard Burr or North Carolina and Sen. Rob Portman of Ohio. Two members of the GOP were not present, including ultra-conservative Ted Cruz. So finding 60 votes to bring Watt up for confirmation is a problem.

3. Watt is a Democrat nominated by Obama. This seems like a petty reason to block a nomination. But I believe it's an accurate assessment. Whether its due to philosophical difference or political spite, many Republicans are content to block every move made by the Obama administration. Even if Watt had a more moderate view of federal housing policy, he'd be hard-pressed in this partisan environment to find much support across the aisle. That's what Charlotte banking icon Hugh McColl Jr. was suggesting in his letter supporting Watt earlier this week.

"I have known (Watt) to be highly intelligent, a man of impeccable character and a straight shooter,” the former Bank of America Corp. (NYSE:BAC) chairman wrote. “There seems to be no reason not to approve Mr. Watt’s nomination other than he was nominated by the President.”