However, legislators are already hatching a variety of plans to rework Fannie and Freddie of the future, saying they should morph into everything from privately held companies, nationalized entities or public utilities, to remaining private entities with government backing.
The new president and a new Congress will ultimately decide what will happen to the mortgage giants.
Republican presidential nominee John McCain's campaign says Fannie and Freddie should be smaller, while Democratic nominee Barack Obama said their private and public roles have to be clarified.
Paulson has concluded there's no way Congress can decide what to do with Fannie Mae and Freddie Mac before the end of the year, but he also said policy makers would make "a grave error if we don't use this time out to permanently address the structural issues" they pose.