Cost of Policing Fannie, Freddie Could Fall

A House bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac would not have any impact on the federal budget deficit if the bill incorporates changes proposed by House Financial Services Committee Chairman Michael G. Oxley (R-Ohio), the Congressional Budget Office concluded.

In addition to setting up a new agency to oversee the companies, the bill would require Fannie and Freddie to set aside 5 percent of their after-tax profits to fund low-income housing. Earlier this month, the CBO said the legislation would cost the federal government $300 million a year over 10 years, largely because Fannie and Freddie are able to deduct their contributions to the fund from their taxes.

But Oxley has been circulating a draft amendment that would end the proposed funds after five years, unless Congress chooses to renew it, and divert a quarter of it to the Treasury. The CBO revised its estimate based on Oxley's proposed changes. The lower price tag, however, is not likely to satisfy critics of the proposed fund, who fear the companies will use the fund to reward political allies.


Media General Profit Swells on Sale

Media General said second-quarter profit more than doubled, to $39.4 million ($1.61 per share), from $18.5 million (78 cents) for the corresponding period a year earlier, largely because of a one-time gain of $19 million from the sale of its stake in the Denver Post. Advertising revenue also improved.

The Richmond-based publishing company said revenue for the quarter ended June 26 increased 4 percent, to $233.7 million.

"Media General's second-quarter results reflected strong newspaper advertising revenue growth," said Marshall N. Morton, president and chief executive.

Advertising revenue rose at the Tampa Tribune and the Richmond Times-Dispatch. In particular, help-wanted advertising at the Tampa daily increased 23 percent, and retail ad revenue was up 12 percent.

Broadcast revenue increased 2.1 percent, but profit was lower because of a decline in political ad revenue during the non-presidential-election year.

The interactive media division's revenue climbed 41 percent, to $4.9 million, reflecting strong classified ad sales. The increase helped cut the division's losses in the second quarter to $978,000.

Shares of Media General closed Tuesday at $66.45, down 30 cents.

Mergers & Acquisitions

District Firm Joins Construction Specialists

District-based law firm Bastianelli, Brown & Kelley has merged with Peckar & Abramson, a New Jersey firm that specializes in construction law.

The D.C. office will have 10 lawyers, with particular expertise in government contracting and construction issues, according to a company news release.

The combined firm will have national reach, with offices also located in New York, San Francisco, Los Angeles, Miami and Fort Lauderdale.

Compiled from staff and news service reports.