It would be good clean fun at this point to blame all that on Fannie Mae and Freddie Mac , the government-backed mortgage companies that are probably the only entities in the United States apt to score lower than Congress in public approval polls. Rep. Spencer Bachus, the Alabama Republican who appears set to take over leadership of the House Financial Services Committee, said Wednesday he believes the companies should be liquidated.

But in a message that won’t be welcomed by Bachus and his broom-wielding pals, S&P attributes more than half its giant cost estimate to the need to set up a new Fannie/Freddie clone, in the name of keeping the creaking U.S. housing market from collapsing and bringing down the banking system and presumably the rest of the economy.

“It appears unlikely in our view that housing and mortgage markets will be able to operate normally without continuing and substantial government involvement,” S&P writes.

S&P said it expects the cost of cleaning up after Fannie Mae and Freddie Mac, which have been under the government’s wing since their rescue two years ago, to nearly double the government’s current investment of $148 billion. S&P, a unit of McGraw-Hill , said it believes taxpayers could end up forking over $280 billion to clean up after the bad loans the government-backed mortgage companies financed and guaranteed during the housing bubble.

That estimate isn’t drastically out of line with existing projections by the likes of the Congressional Budget Office. But that’s far from the end of taxpayers’ prospective housing tab, unfortunately.

S&P says it could cost an additional $400 billion to capitalize a government-backed successor to Fannie and Freddie, in part to keep Americans in the 30-year, fixed-rate mortgages no banker could plausibly want on his balance sheet.

In making the estimate S&P has cast its lot with the Obama administration, which has said it wants to change the current system but hasn’t said precisely how, and against the House Republicans who have been saying without anyone quite believing them that they can set the mortgage market back into private hands without enormous disruption.

“Although federal authorities have taken no concrete public steps toward sponsoring a GSE alternative, Standard & Poor’s believes that it’s a useful exercise to consider how much such a recapitalization might cost taxpayers,” S&P writes.

Republican representatives such as Scott Garrett of New Jersey and Jeb Hensarling of Texas have put forth legislation that would put the firms’ balance sheets on the federal budget and specify when their operations must end. Both these ideas seem reasonable in their own right, but will they be able to make it through a Democratic-leaning Senate? Likewise the administration’s more sensible proposals may have trouble surviving the Republican-controlled House. Ah, the joys of gridlock when considering a dysfunctional but popular subsidy.

What’s more, with the economy so weak that the Fed now feels compelled to act as the stimulator of last resort, and the nation still cowering under a massive backlog of unsold houses, it is hard to imagine when the outlook for the housing market and the financial system won’t still be best described as fragile. That’s going to make it very hard for anyone to put an end to the housing subsidies, no matter how much empty liquidation talk is swirling around in some circles.