Mortgage giants Fannie Mae and Freddie Mac are blamed to greater or lesser degrees — depending on the political ideology of the finger-pointer — for their roles in the 2008 financial meltdown.

But even before the bursting of the mortgage bubble, critics complained the mortgage companies were risky. As government-sponsored entities, or GSEs, the argument went, they operated with an implied guarantee that federal taxpayers would rescue investors if the companies got in trouble.

And taxpayers have bailed them out to the tune of about $134 billion so far, according to reports.

So the Obama administration plans to make a number of proposals about what should happen to Fannie and Freddie. An administration white paper expected later this week will reportedly call for the two companies to be gradually euthanized.

Nick Timiraos at The Wall Street Journal (subscription required) reported:

More than two years after the government seized Fannie Mae and Freddie Mac, the Obama administration will recommend phasing out the housing-finance giants and gradually reducing the government’s footprint in the mortgage market, according to people familiar with the matter.

The administration is expected to include three options for a post-Fannie and Freddie world when it releases a long-awaited proposal for the future of the nation’s $10.6 trillion mortgage market, which could come as soon as Friday. Together with federal agencies, Fannie and Freddie have accounted for nine of 10 new loan originations in the past year.

Jim Tankersley at the National Journal (subscription required) adds the following:

In the wreckage of the housing crash, Fannie, Freddie, and another government-sponsored enterprise, Ginnie Mae, underwrite 95 percent of all new residential mortgages, a share that will complicate policymakers’ efforts to extricate the GSEs from the mortgage market.

But that appears to be the administration’s plan. Speaking on condition of anonymity, the administration official said that the Treasury Department will propose the eventual elimination of Fannie and Freddie. The official confirmed that Treasury will also support lowering the maximum amount of a mortgage that Fannie and Freddie can guarantee, after lawmakers raised it on an emergency basis two years ago.

The fact that the mortgage giants provide so much of the liquidity or money available to make new mortgages dictates that their glide path to elimination would have to be gradual to prevent chaos in the mortgage markets.

And as the reports indicate, the Obama proposals would just be a starting point that would undoubtedly launch a rollicking debate over how to replace Fannie, Freddie and Ginnie.

Obama’s proposals would also help the White House defuse to some extent Republican charges that the mortgage giants played the key role in the housing crisis.

While Fannie and Freddie have had ties to both Democrats and Republicans, Democrats have tended to defend them while Republicans have tended to criticize them.

Indeed, a high-profile Clinton administration budget director, Franklin Raines, came to symbolize Democratic ties as Fannie Mae’s CEO during a period when the company engaged in questionable accounting practices. Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.