Senate housing action less certain: Bush aide

By Patrick Rucker and Kevin Drawbaugh

WASHINGTON (Reuters) - After months of debate, the chances for final congressional action on a sweeping housing rescue bill look less certain as bipartisan agreement eludes lawmakers, a White House economic adviser said on Tuesday.

The Senate Banking Committee is set to vote on Thursday on legislation to create a federal backstop for failing mortgages and a new regulator for Fannie Mae and Freddie Mac, the financing giants central to the housing market.

But efforts to forge a compromise between Democrats and Republicans on the panel have so far failed, and the committee vote is expected to largely fall on party lines.

That could be enough to move the Democratic bill to the floor, but it may stall there without a clear 60-vote majority of support needed to overcome Senate procedural obstacles routinely mounted by the Republican minority.

"Senate action is now much less certain, based on the appearance of what looks like (Thursday's) mark-up (of the bill) is going to be," Keith Hennessey, deputy director of the National Economic Council, told Reuters.

Alabama Sen. Richard Shelby, top Republican on the banking panel, has expressed little optimism of reaching agreement with Democrats before the committee working session.

"Will we reach an agreement between now and Thursday? I'm not sure," he told Reuters in an interview on Monday.

In an interview on Tuesday, Bush administration adviser Hennessey said the White House and Shelby were both determined that any new regulator for Fannie Mae and Freddie Mac would give the two mortgage finance companies strong oversight.