Supporters of H.R.1461, the Federal Housing Finance Reform Act of 2005, are optimistic it will go to the House floor soon, without nonprofit anti-advocacy language proposed by a group of conservative Republicans. The language would have disqualified any nonprofit that lobbies or carries on other advocacy activities from applying for grants under a proposed new affordable housing program. On May 25, the House Financial Services Committee passed H.R. 1461, a proposal to strengthen oversight of government-sponsored enterprises (GSE), such as Fannie Mae. The bill creates an independent regulator for the GSEs known as the Federal Housing Finance Agency (FHFA). The legislation is, in large part, a response to accounting irregularities at Fannie Mae and Freddie Mac that came to light in 2004. Financial Services Chairman Michael Oxley (R-OH) and Financial Services Capital Markets Subcommittee Chairman Richard Baker (R-LA) modified the bill to create an Affordable Housing Fund (AHF). Fannie Mae and Freddie Mac would be required to contribute 5 percent of their after-tax income to this fund. The provision, which prompted committee Democrats to vote for of the bill, has been the center of negotiations between the sponsors and the Republican Study Committee (RSC), which is comprised of conservative House members. RSC members opposed the fund, claiming it would harm private enterprise. After failing to stop the bill in committee, members of the RSC contended that money from the fund will be used to "finance third-party advocacy groups that have agendas far beyond simply increasing affordable housing for low-income Americans." Rep. Tom Feeney (R-FL) took an even stronger tone, explaining that he would "rather burn the money then give it to advocacy groups." The RSC wrote to then-Majority Leader Tom DeLay (R-TX), opposing the AHF and asking that the bill "not be scheduled for consideration by the full House until these concerns were addressed in the appropriate manner." DeLay held up the floor vote on the bill, but has since stepped aside as Majority Leader after being indicted in a Texas campaign finance case. Oxley and Baker are opposing inclusion of the RSC's suggested anti-advocacy language. Along with Rep. Bob Ney (R-OH), they circulated a letter on Sept. 20 to colleagues, entitled "The Truth About the Affordable Housing Fund." The letter clarified misleading information about the AHF put forward by the Republican Study Committee, countering RSC accusations that grants will be used for political advocacy, that the AHF is a "slush fund," and that it will become an entitlement fund. To assuage the RSC, Oxley and Baker added a provision that restricts the funds to "the production, preservation, and rehabilitation of rental housing" and "the production, preservation, and rehabilitation of housing for homeownership." Additionally, administrative and outreach costs are limited to the costs of maintaining the affordable housing fund and carrying out the program. Any organization found to be violating the provision would be permanently banned from receiving additional grants from the fund. Critics of these restrictions believe they hinder the free speech of AHF grantees, forcing them to choose between receiving federal grants or speaking out on behalf of the people they serve. Many nonprofit groups provide valuable information and perspective that enable Congress and federal agencies to make more informed decisions. Nonprofit advocates fear this would be severely restricted by the language proposed by the RSC. In contrast, the Oxley provision, a restatement of current law, provides ample protection against violations of the prohibition on using federal funds for lobbying. The current system -- in place for more than 20 years -- works well and does not need to be changed, according to opponents of the RSC restriction. A companion bill, S. 190, passed the Senate Banking, Housing and Urban Affairs Committee on July 28 by a party-line vote of 11-9 without an affordable housing provision. Chairman and sponsor Richard Shelby (R-AL) reportedly has "deep concerns" about creating a program that would encourage Fannie Mae and Freddie Mac to grow larger. This could be a major sticking point should the House bill pass with the AHF provision.