This is a rush transcript from "Your World With Neil Cavuto," October 7, 2008. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: All right, the Dow diving another 508 points, investors spooked by Fed head Ben Bernanke saying more spooky times lie ahead for the economy. Meantime, on Capitol Hill, Henry Waxman, chairman of the House Oversight Committee, agreeing today to hold hearings on the failure of mortgage giants Freddie Mac and Fannie Mae.
My next guest has been calling them the toxic twins. He pushed for this. He got this, Republican Congressman Christopher Shays.
Congressman, when will these hearings begin?
REP. CHRISTOPHER SHAYS (R), CONNECTICUT: We don't know, Neil.
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I am not holding my breath that they will be done before the election. In other words, they have scheduled five hearings. And all five hearings are — will be interesting and helpful, but they don't even compare to the need to look at Fannie Mae and Freddie Mac.
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They have securitized half of the $12 trillion of mortgage debt that we have. They have been at the center. And the mortgage debt is what has really brought us down.
CAVUTO: That's right.
SHAYS: And, yet, we are avoiding it. And they never had to comply to Sarbanes-Oxley, because they were not under the 1933 or '34 act. And there's huge resistance to putting them under that, huge resistance to...
CAVUTO: Well, the bigger issue, Congressman — and...
CAVUTO: ... I might just be cynical — that this is a scandal that can date back, clearly, to the Clinton administration.
So, if you are going to blame people, there is certainly a lot of blame to go around, but this one has its earliest fingerprints in a Democratic administration. So, methinks that, by raising it potentially after the election, there's some funny stuff going on.
SHAYS: Well, it should have been one of the five hearings. And the reason I mention it is, we put in legislation in 2002 and 2003. To Henry's credit, he was on the 2002 bill. This was legislation that Ed Markey and I both introduced. So, that part of it was bipartisan.
CAVUTO: So, have them now. They're in such a rush. These hearings are backed up like planes at La Guardia, Congressman. Why not just roll this one in? It is the biggest one of all of them.
SHAYS: Hey, would you take my place at the next hearing, and make that argument? I am doing my best.
SHAYS: You know, first it was not even on the agenda. Then they said they were looking at it. Now they say they are going to have hearings. But, when we asked when, he said, well, he's going to work this out with both sides of the aisle.
Well, it's not hard to work out. We would like it as one of the five, or add another hearing.
CAVUTO: You know, what bothers me mostly about the hearings is that there are really political showcase events. And, obviously, the four that have been targeted are used as Bush-bashing, White House-bashing events.
I am not saying, you know, the buck does not stop with the president, but, as I indicated, Congressman, with you, the buck passes quite a few people on the way to him. So, these are easy, kind of scapegoat events, are they not?
SHAYS: Well, the — the bottom line is, the one hearing that would clearly show culpability on the part of Congress would be Fannie Mae and Freddie Mac.
SHAYS: So, these hearings we are having, we are looking at everyone but ourselves. And, yet, Fannie Mae and Freddie Mac, it's the most important issue. They are the toxic twins.
SHAYS: They did securitize $1 trillion worth of — of what we call subprime loans.
CAVUTO: Yes. You are right, Congressman. You are one of the first to say, look, "I'm part of the problem, too," which means your career is probably not going to last long.
CAVUTO: That is a joke. It's a joke.
SHAYS: I know. But, you know...
CAVUTO: ... thank you very much.
SHAYS: Is there any opportunity for me in the media, or can I, you know, take your job, or...
CAVUTO: Well, at the way we are going, at the way we're going, very likely.
CAVUTO: But, Congressman, thank you.