Lawmakers are outraged at the amount of bonus pay awarded to executives at ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://freddiemac.com Ã¢â‚¬Â¦ and they're not stopping with hot-tempered rhetoric.
Regulatory filings show that the ""Federal Housing Finance Agency"":http://www.fhfa.gov (FHFA) and the ""U.S. Treasury"":http://www.treasury.gov signed off on $12.79 million in performance-based bonuses for the 10 highest-ranking executives at the GSEs.
Rep. Spencer Bachus (R-Alabama), chairman of the House Financial Services Committee, has scheduled a committee vote for next Tuesday on a bill that would suspend the compensation packages awarded to these executives.
Underscoring that the bailout of the GSEs is the biggest in history, Chairman Bachus said, ""The American people should be outraged at the multi-million dollar taxpayer-funded bonuses given to the executives of Fannie Mae and Freddie Mac. These organizations were ground zero for the mortgage market meltdown, the catalyst for an economic decline that has cost Americans more than seven million jobs.""
Defending his wards against such a statement, FHFA Acting Director Edward DeMarco said in a letter published Thursday that the individuals responsible for the GSEs' failures and ultimate seizure by the government have long since left the companies and were not given severance or golden parachutes.
DeMarco stressed that the new compensation structure adopted has reduced pay for senior executives at Fannie[COLUMN_BREAK]
Mae and Freddie Mac by an average of 40 percent from pre-conservatorship levels.
""By law, the conservatorships are intended to rehabilitate the Enterprises as private firms,"" DeMarco said. ""Their officers are not public employees, and FHFA has used market compensation measures to target executive compensation at or below the median of comparable private sector positions.""
Bachus, though, cites an April report from FHFA's inspector, which revealed that the top six executives at Fannie and Freddie had been paid more than $35 million since the companies were taken over by the federal government.
He calls the multi-million dollar compensation ""an added insult to the taxpayers who are forced to foot the bill.""
Bachus' Equity in Government Compensation Act (H.R. 1221) received bipartisan support when it was approved by the Capital Markets and Government Sponsored Enterprises Subcommittee in April.
It would suspend compensation packages for GSE executives and mandates that other employees of Fannie and Freddie would be paid according to the federal government's ""General Schedule"" pay scale. The bill also calls for the 2010 and 2011 pay packages of senior executives to be returned to taxpayers.
Blood is boiling across both legislative chambers. Last week, a bipartisan group of 60 ""senators shot off letters"":http://dsnews.comarticles/lawmakers-want-answers-on-bonuses-to-gse-execs-2011-11-08 to DeMarco and Treasury Secretary Timothy Geithner denouncing the $12.9 million bonuses as Ã¢â‚¬Å“wildly imprudent.Ã¢â‚¬Â
Sens. Jay Rockefeller (D-West Virginia) and John McCain (R-Arizona) plan to take their disapproval one step further. TheyÃ¢â‚¬â„¢ve announced their intention to propose an amendment prohibiting Fannie Mae and Freddie Mac executives from receiving future multi-million dollar bonuses as long as the government-backed mortgage companies remain in federal conservatorship.
The senators say they will offer their amendment Ã¢â‚¬Å“as soon as a suitable legislative vehicle is on the Senate floor.Ã¢â‚¬Â