by Rep. Peter Roskam (IL)
How is your performance at work judged? If you’re an executive at Fannie Mae or Freddie Mac, you can manage organizations that have cost taxpayers more than $110 billion, have an unlimited commitment of taxpayer resources, and yet you can still make $6 million.
Rep. Barney Frank (D-MA) wrote a letter about Fannie and Freddie bonuses on March 19th, 2009, to then-Director of the Federal Housing Financing Agency James Lockhart in which he said that “[t]he public, having provided significant support for the purpose of restoring trust and confidence in our country’s financial system, rightfully insists that large bonuses such as these awarded by institutions receiving public funds at a time of serious economic downturn cannot continue.”
I agree with Chairman Frank. Fannie Mae and Freddie Mac, the government-backed companies seized by federal regulators in 2008, have benefited from over $110 billion of taxpayer bailout funds since their collapse 17 months ago. Despite this generous gift from taxpayers, the CEOs of these two mortgage-lending giants, Michael Williams and Charles Haldeman, each were awarded $6 million compensation packages on Christmas Eve.
What I propose is restricting any Fannie or Freddie employee, while those entities are still wards of the government, from being compensated more than members of our Armed Forces. Let’s consider the Chairman of the Joint Chiefs of Staff.
There are few government personnel that perform a more solemn and vital duty to our country than the Chairman. So long as Fannie and Freddie are effectively owned by the government, there is no reason any of their employees should be rewarded, on the backs of taxpayers, an income that most Americans will only ever hope to see deposited in their own bank account.
The “Protecting Taxpayers From Excessive Compensation Act” would guard against that exact inequity.
The public has a rightful expectation that taxpayer resources be managed prudently. In recent years, by both parties, that trust has been violated. Given our ballooning debt and deficit, it is imperative that this Congress take immediate steps to restore that trust. This is a commonsense first step.