By Benton Ives, CQ Staff

Key lawmakers Monday lent their support to a government plan to backstop mortgage finance giants Fannie Mae and Freddie Mac, saying they expect the proposal to be folded into the massive housing package already moving through Congress.

Senate Banking Chairman Christopher J. Dodd ., D-Conn., said that while he would have preferred “intellectually” to move the backstop plan separately, “it probably makes more sense to do it as one package. I think that’s the better way to proceed.”

House Financial Services Chairman Barney Frank , D-Mass., agreed that the White House proposal unveiled by Treasury Secretary Henry M. Paulson Jr. should move along with the housing package.

“The bill will include the proposals announced yesterday by Secretary Paulson to ensure that Fannie and Freddie have the resources they need to continue to play their vital role in America’s housing finance system,” Frank said in a statement.

Late Sunday, the Bush administration moved forward with an ambitious plan to shore up the battered mortgage financiers. Under the plan — parts of which require congressional approval — the Treasury Department would increase an already existing government line of credit to Fannie and Freddie and ask for the authority to buy an equity stake in the companies to keep them financially sound.

The plan also called for including the Federal Reserve in a supervisory role over Fannie and Freddie.

The White House wants the proposals to move quickly, and early signals from lawmakers suggest Congress could steam ahead with the new plan, as well as the housing package (HR 3221) by the end of the week.

“At this juncture, I think the administration proposals are valid. I think they have value,” Dodd said.

With Dodd and Frank putting their weight behind the proposal, it could move through Congress relatively quickly. As it stands now, the current housing package has won strong bipartisan support in the Senate. It includes a plan to help borrowers avoid foreclosure, a regulatory overhaul of Fannie and Freddie and a package of housing-focused tax breaks.

“I think we could complete it in a week,” Dodd said.

Details of the administration proposal are still emerging. Dodd said some the requested powers would be temporary, expiring on Dec. 31, 2009, though he stressed he was still familiarizing himself with the specifics.

Dodd said he would like time to examine the proposal further, and left open the possibility that Congress could make further changes. “I want to reserve the option of adding something to them,” Dodd said.

While Frank and Dodd appear to have reached at least preliminary consensus, some Republicans may have concerns about moving forward so quickly.