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 purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill's language. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. 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.
The bill stalled, and the populist storm that spawned it seemed to pass.īut 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. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately.
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.