President Obama delivered his latest address on the economy Tuesday, claiming a recovery in the housing market and calling for private lenders to form the “backbone” of the market, while the federal government plays a more limited role. Speaking in Phoenix, Arizona, Obama backed a bipartisan Senate plan to end the mortgage firms Fannie Mae and Freddie Mac “as we know them” in order to help avert another housing crisis.

President Obama: “One of the key things to make sure it doesn’t happen again is to wind down these companies that are not really government, but not really private sector — they’re known as Freddie Mac and Fannie Mae. For too long, these companies were allowed to make huge profits buying mortgages, knowing that if their bets went bad, taxpayers would be left holding the bag. It was 'heads we win, tails you lose.' And it was wrong. And along with what happened on Wall Street, it helped to inflate this bubble in a way that ultimately killed Main Street.”