The US economy is struggling to overcome the legacy of its busted housing market. Millions of homeowners have mortgage debt that is greater the market value of their homes. Many of them will not be able to service their debt, and their lenders will suffer huge losses. The US Treasury has proposed a plan to reduce the number of mortgage defaults that are dragging housing prices down. It is willing to subsidize the loss that will be taken by Fannie Mae and Freddie Mac if they write down the principle on some mortgages that they hold. That would reduce the number of foreclosures and help to stabilize home prices. The official who is in charge of Fannie Mae and Freddie Mac has refused the offer from the Treasury. It would improve the finances of Fannie Mae and Freddie Mac which he oversees, but he argues that it would be bad for the taxpayers. In other words, he made a public policy decision that blocks the government from implementing a program that it believes to be in the public interest. It is not in his job description to make public policy decisions.
Unfortunately, the administration cannot remove the official without the approval of Congress. The official was a temporary appointee by the Bush administration when his predecessor resigned. Republican's in Congress apparently support his efforts to block government policy. They refuse to let the President replace him with a permanent appointee. This is another example of actions taken by Republicans to block programs that might help the economy. They prefer to run an election campaign in which they can blame the President for not doing enough to restore growth.