Big Government May Set Your Salary

From the "Washington Examiner"-----

Beyond AIG: A bill to let Big Government set your salary
By: Byron York
Chief Political Correspondent
March 31, 2009
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.

Byron York, The Examiner’s chief political correspondent, can be contacted at byork@washingtonexaminer.com. His column appears Tuesday and Friday, and his stories and blog posts can be read daily at ExaminerPolitics.com.

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Ok, Ben Ferguson is discussing this on his show right now here in Memphis, and I have been trying to listen to it (between going back and forth cleaning my house and cooking dinner and trying to post on the blog--I am such a multi-tasker) that if I am reading and understanding this all correctly (and to hear Ben tell it on his show) this is absolutely crazy.

Now, the question that Ben asked is 'If the government came into your company and started telling you how you are going to run your company and said to "cut" peoples' salaries by 90%--would you continue to stay and work there'?

My guess is not 'no', but "HELL NO"!!! Now, I am absolutely terrible at mathematics (even in school it was my WORST subject as I was very lucky to make as high a grade as a 'D') but someone who makes $100,000 a year or more--to take a 90% pay cut is a hell of a lot of money. I mean I work at Pizza Hut for peanuts and a 90% pay cut for me, I would be litterally working FOR FREE. I may as well not even clock in (or show up for that matter).

But this has nothing to do with Pizza Hut, but with these other major, major businesses and companies that got bailouts and I really think this is just wrong. It is not the governments' business--they [government] they just have no place in our private owned businesses.

I mean, correct me if I am wrong, PLEASE, but since when is it the government's business how we own, operate, and run our companies or how much we pay our employees?????? Our country is turning more and more into a 'communist state' by the day when the President of the United States thinks that it is HIS J-O-B to own the automotive industry, the banks, the insurance companies, etc etc etc.

Did I suddenly wake up on a "life sized Monopoly board" where Obama owns everything except 'Boardwalk' and 'Park Place' and THOSE are NEXT?!?