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Bill Gives Feds Control Over Bailout Pay

From (the great) Byron York, via the Washington Examiner:

House Financial Services Committee Chairman Rep. Barney Frank, D-Mass., left, talks with Treasury Secretary Timothy Geithner, right, and Federal Reserve Chairman Ben Bernanke, on Capitol Hill Tuesday, March 24,2009.

Beyond AIG: A bill to let Big Government set your salary

By Byron York
3/31/09

It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately…

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees — not just top executives — of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill’s language. That includes regular pay, bonuses — everything — paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.

In addition, the bill gives Geithner the authority to decide what pay is "unreasonable" or "excessive." And it directs the Treasury Department to come up with a method to evaluate "the performance of the individual executive or employee to whom the payment relates."

The bill passed the Financial Services Committee last week, 38 to 22, on a nearly party-line vote. (All Democrats voted for it, and all Republicans, with the exception of Reps. Ed Royce of California and Walter Jones of North Carolina, voted against it.)

The legislation is expected to come before the full House for a vote this week…

Why not? In for a penny, in for a pound.

Besides, who knows more about how much money you should make than Barney Frank and Tim Geithner?

This article was posted by Steve on Wednesday, April 1st, 2009. Comments are currently closed.

5 Responses to “Bill Gives Feds Control Over Bailout Pay”

  1. Liberals Demise says:

    Question to Barney:
    “How many boyfwiends and man ho’s do you expwect to get out of this pway for pway scheme you have contwoll over”?

  2. BannedbytheTaliban says:

    Does this include banks like Wells Frago and JP Morgan who had TARP money forced upon them? And if so, I wonder how many business in the future will also be forced to take goverment money? We are half way to full nationalization of banks, only 62 days.

  3. MinnesotaRush says:

    “The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds.”

    Hmmmm. I’m thinkin’ there’s some union bosses that might not like this idea!

    With this in place, the guv could rework the union contracts/agreements as well (putting o-blah-blah and ‘team’ in a HUGE position of, shall we say, “influence”?!?!?!

  4. TwilightZoned says:

    Hmmmm…you want pay for performance? How about rating Congress and paying them accordingly? Be careful what you wish for…

  5. proreason says:

    .


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