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

[me]

Beyond AIG: A bill to let Big Government set your salary
By: Byron York
Chief Political Correspondent
03/30/09 9:00 PM
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)

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."

After the AIG bonus tax bill was passed, some members of the House privately expressed regret for having supported it and were quietly relieved when the White House and Senate leadership sent it to an unceremonious death. But populist rage did not die with it, and now the House is preparing to do it all again.http://www.washingtonexaminer.com/politics/Beyond-AIG-A-Bill-to-let-Big-Government-Set-Your-Salary-42158597.html

[Exterminator]

Congratulations for posting a month old subject that's already been discussed here.

[Gardengirl]

Oh, I see. We skip going to socialism and instead skip ahead to the next step-communism.

[kimmi]

The government already sets my salary. 

[Exterminator]

The government already sets my salary. 

Being the largest single employer in the country, the government sets more people's salaries than anyone else.

[kimmi]

Exactly!!

[me]

So does that mean it's ok for them to take over the banks and auto industry?

[Bo D]

How many of you set your own salary?

[Henry Hawk]

george orwell

[Exterminator]

So does that mean it's ok for them to take over the banks and auto industry?

No, they should let them all fail and our society devolve into anarchy.  Hope you're ready!

[Henry Hawk]

So does that mean it's ok for them to take over the banks and auto industry?

No, they should let them all fail and our society devolve into anarchy.  Hope you're ready!

it seems like it is either SOCIALISM or ANARCHY....MORE GOV or LESS GOV.....if I had to choose....I got to go with LESS gov and let the chips fall where they may.

Why do you think....if the auto industry fails...we become and ancarchy?....

[Exterminator]

it seems like it is either SOCIALISM or ANARCHY....MORE GOV or LESS GOV.....if I had to choose....I got to go with LESS gov and let the chips fall where they may.

Why do you think....if the auto industry fails...we become and ancarchy?....

If the banking system fails, you can bet on it.  And I agree...let the chips fall where they may...you should be in a great position to defend yourself with your extensive training and whatnot. 

[Henry Hawk]

it seems like it is either SOCIALISM or ANARCHY....MORE GOV or LESS GOV.....if I had to choose....I got to go with LESS gov and let the chips fall where they may.

Why do you think....if the auto industry fails...we become and anarchy?....

If the banking system fails, you can bet on it.  And I agree...let the chips fall where they may...you should be in a great position to defend yourself with your extensive training and whatnot. 

well, I may have NOT had any formal training, but I hunted, trapped and fished during my childhood years...and I am a father of five kids I adore with ALL my heart....I can promise you I CAN/WILL defend with the best of them...though I do NOT have the arsenal that I WISH I had, but I do have a small (and now growing) defense department...

the only way we can truly EVER restor America, the way our forefathers intended it to be....is for "letting the chips fall"...and let the natural order of life run it's course.

[Exterminator]

well, I may have NOT had any formal training, but I hunted, trapped and fished during my childhood years...

LMAO!  Yeah, and that's exactly like defending yourself from an armed human!

the only way we can truly EVER restor America, the way our forefathers intended it to be....is for "letting the chips fall"...and let the natural order of life run it's course.

Or end its course.

[mcgonser]

So does that mean it's ok for them to take over the banks and auto industry?

No, they should let them all fail and our society devolve into anarchy.  Hope you're ready!

Thats the beauty of letting the banks fail. Not all would, just those who are guilty of the nefarious actions to begin with. A lot of banks are solid, took no money and are doing OK. Thank You