WASHINGTON -- The government takeover of mortgage giants Freddie Mac and Fannie Mae, which was confirmed Sunday, could cost taxpayers tens of billions of dollars.

What Does Fannie-Freddie Takeover Mean?

But Treasury Secretary Henry Paulson said the cost could have been far greater if either of them had been allowed to fail. He said that would have affected the ability of Americans to get home and auto loans, and other credit.

The Bush administration's move puts both agencies into a government conservatorship that will be run by the Federal Housing Finance Agency.

Officials said the executives and board of directors of both institutions have been replaced. Former Merrill Lynch vice chairman Herb Allison will head Fannie Mae, and former US Bancorp vice chairman David Moffett was picked to head Freddie Mac.

Paulson said it will be up to Congress and the next president to decide what the two companies will ultimately look like.

The companies own or guarantee about five trillion dollars in home loans, or about half of the nation's total.

President George W. Bush said Sunday that the historic government takeover of mortgage giants Fannie Mae and Freddie Mac is necessary because of the "unacceptable risk" that they can longer operate soundly.

In a statement, the president called the moves temporary. He said putting the companies on sound footing is "critical to the health of our financial system." He said the government action came after federal regulators determined the housing giants "cannot continue to operate safely and soundly." He said such uncertainty posed an "unacceptable risk to the broader financial system and our economy."

The White House candidates weighed in on the takeover. Speaking to CBS's "Face the Nation" on Sunday, Sen. John McCain said the reorganization is necessary to keep people in their homes.

McCain Talks About Economy

"There's got to be some confidence that we've stopped this downward spiral. It's hard, it's tough, but it's also the classic example of why we need change in Washington. It's an example of cronyism, special interest, lobbyists, a quasi-governmental organization where the executives were making hundreds of-- hundred and some million dollars a year while things were going downhill, going to hell in a handbasket."

McCain said Fannie and Freddie need more regulation and oversight.

Speaking Saturday in Indiana, Sen. Barack Obama said allowing the firms to collapse would make the weakened housing market even worse. But he said any federal action should focus on helping the economy and struggling homeowners.

Obama Discusses Economy

"We can't have a situation in which, during boom times, management and investors are soaking up huge profits, taking extraordinary risks, and thinking to themselves that if they get into trouble because of these risky investments that somehow the taxpayers are going to be there to bail them out," ABC News reported Obama said.