Barney Frank Says Multi-Million Dollar Bonuses for Government-Owned Freddie, Fannie ‘Too High’–But Nothing Can Be Done About It

Nicholas Ballasy
January 15, 2010

The Obama administration recently approved base salaries of $900,000, plus $3.1 million in deferred payments, and another $2 million in bonuses for the CEOs of the failed mortgage giants Fannie Mae and Freddie Mac. When asked if tax dollars should pay those bonuses or if they should be cancelled, the chairman of the House Financial Services Committee, Rep. Barney Frank (D-Mass.), told that the bonuses were “too high” but “nothing can be done now.”

The $6-million compensation packages were approved by the Treasury Department and the Federal Housing Finance Agency, and made public on Dec. 24, 2009, Christmas Eve.

When asked whether the bonuses should be paid or cancelled, Rep. Frank said: “No, I thought they were too high. Again, we had some language in the bill we passed that still would have been administered by them but would have put some limits on them.” Frank spoke with at a Capitol Hill press conference on executive compensation on Wednesday.

Frank was referring to the bill H.R. 1586, proposed in March of 2009. It would have imposed a 90 percent tax on bonuses issued to executives at companies receiving funds from the Troubled Asset Relief Program (TARP), which is part of the $700 billion Emergency Economic Stabilization Act of 2008.

Fannie Mae and Freddie Mac received money from TARP, and the federal government seized control of the mortgage firms in September 2008.

The Senate version of the bill referenced by Rep. Frank is S. 651, which would impose an excise tax on both the employee and entity equal to 35 percent of the bonus issued.

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