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April 01, 2009
Beyond AIG: A Bill to Let BIG Government Set Your Salary
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. Frank's committee has passed a bill giving Geithner extensive control over salaries of employees working at companies receiving government bailout funds. (AP Photo/Evan Vucci)
Beyond AIG: A bill to let Big Government set your salary
By Byron York
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.
Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.
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, and, just like the AIG bill, its scope and retroactivity trouble a number of Republicans.
"It's just a bad reaction to what has been going on with AIG," Rep. Scott Garrett of New Jersey, a committee member, told me. Garrett is particularly concerned with the new powers that would be given to the Treasury Secretary, who just last week proposed giving the government extensive new regulatory authority. "This is a growing concern, that the powers of the Treasury in this area, along with what Geithner was looking for last week, are mind boggling," Garrett said.
Rep. Alan Grayson, the Florida Democrat who wrote the bill, told me its basic message is "you should not get rich off public money, and you should not get rich off of abject failure." Grayson expects the bill to pass the House, and as we talked, he framed the issue in a way to suggest that virtuous lawmakers will vote for it, while corrupt lawmakers will vote against it.
"This bill will show which Republicans are so much on the take from the financial services industry that they're willing to actually bless compensation that has no bearing on performance and is excessive and unreasonable," Grayson said. "We'll find out who are the people who understand that the public's money needs to be protected, and who are the people who simply want to suck up to their patrons on Wall Street."
Wild Thing's comment.........
It means the end of capitalism, and the end of the free market system the end of freedom and liberty and the beginning of communism control of our country.
Lockheed Martin, Boeing, you name the contract, there ya go. Anyone who does business with the Fed will eventually fall under this as they stretch it to fit.
Gee, shouldn’t we also be setting salaries for Washington? Not to mention term limits and pension qualification service.
These clowns go to Washington, make millions and retire on our nickel. Barney is a dangerous and stupid man.
Posted by Wild Thing at April 1, 2009 06:48 AM
Comments
I knew this was coming, too. That extra money on your paycheck-something you can't control is the government putting you on their payroll. You have to do as they say from here on out. You don't think they gave that extra $13 a week out of the goodness of their hearts, do you?
Posted by: Lynn at April 1, 2009 08:16 AM
Your comment WT was my first thought, pure communism.
Barney Frank is on a roll. His leftist agenda has already been the blueprint for the lending crisis. Now he wants the Federal government to control wages and compensation in America. More to come, I'm sure.
Posted by: TomR at April 1, 2009 10:51 AM
Their arrogance is surpassed only by their stupidity. Everyone of them should be brought up on charges of malfeasance of office by virtue of ignoring the tenets of the Constitution.
Congressman Grayson is an idiot. Neil Cavuto interviewed him and he tried to dodge the question on what size bonuses companies would be allowed to give to their employees and he danced around the question like the amateur he is. Although Grayson never did answer the question, probably because had he done that Nancy would have bitched slapped him, but he did dodge the question and tried in vain to avoid any substantive discussion.
Posted by: Mark at April 1, 2009 05:27 PM
One of the biggest problems America has is that there is no way for anyone to remove a really obnoxious and destructive member of Congress or the Judiciary. Impeachment of judges is too complex for the simple-minded Congress and they simply will not discipline their own members.
We are forced to live under judicial decisions that make sense only in “Alice in Wonderland.” We suffer under stupid Senate and House rules based on seniority moving incompetents into positions of enormous power. Why would anyone vote for Arlen Specter to be on the Senate Judiciary Committee or Barney Frank on the House Banking Committee? There are reasons but the reasons are utterly corrupt and should carry penalty for the party that leaves them on those committees.
The Senate used to be controlled by the States until the seventeenth amendment. Removal of a jerk like Chris Dodd could be negotiated with Connecticut in exchange for something that they wanted from another state. We need a way for a majority of the Governors to initiate removal of the destructive members of the Judiciary and Congress.
Posted by: Avitar at April 1, 2009 05:51 PM
Lynn, good point, thank you for pointing
that out about the $13.00 I had forgotten
about that and you are absolutely right!!!!
Gosh I bet a lot of peoople forgot about it
and have no clue how that will be just like
you said. Thanks Lynn.
Posted by: Wild Thing at April 1, 2009 07:36 PM
Tom, I agree, and if ever Barney Frank
and the rest of them that lead the way
in why all this happened with Fanny
Mae etc. and they really get taken
down for it I will dance in the streets
and be soooo happy. Just to see true
justice done once would feel so good.
Posted by: Wild Thing at April 1, 2009 07:43 PM
Mark, good one...... "Their arrogance
is surpassed only by their stupidity."
Thank you for othe video Mark and the link
about Grayson today.
Posted by: Wild Thing at April 1, 2009 07:46 PM
Avitar, thank you that is something to
think about for sure, I too wish there
was a way to get rid of (vote out ...
do something) the ones that are proven
to be destructive to our country.
The more these people get away with things
the more they will do wrong,they will just
keep doing more and more. augh it is
endless.
Posted by: Wild Thing at April 1, 2009 07:53 PM
