Beyond AIG: A bill to let Big Government set your salary

[RadioFreeSeaLab]

http://www.washingtonexaminer.com/politics/Beyond-AIG-A-Bill-to-let-Big-Government-Set-Your-Salary-42158597.html


More from Barney Frank.

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.

[RoadKingLarry]

That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake,

Will they be able to stretch this to any company that has government contracts or does any business with the government?

[AZRedhawk44]

Constitution:  Article 1, Section 9:

No Bill of Attainder or ex post facto Law shall be passed.

This would be ex post facto, wouldn't it?

[Wes]

Will they be able to stretch this to any company that has government contracts or does any business with the government?

Take control of any company in trouble, who has taken money from the government bailout.
Take control of any company in trouble, who has taken money from the government.
Take control of any company in trouble.
Take control of any company.

That's what it looks like to me, and it worries me.  It seems like they're beginning to desensitize the public to the government taking over corporate entities.

[S. Williamson]

It's worse than that.  People are clamoring for that very thing.

[trapperready]

Just a bet, but with the focus on healthcare reform by this administration, I'm betting they'll float some sort of wage controls for physicians within the next couple years (likely by the end of 2009). After all, most docs accept government money from their Medicare patients and many of them fall in the >$250K bracket that is universally targeted by Obama.

This AIG and auto industry stuff is nothing more than them getting the camel's nose under the tent.

I hope I'm wrong, but anyone who's getting any federal money better get ready to go through the wringer.

[AZRedhawk44]

I hope I'm wrong, but anyone who's getting any federal money better get ready to go through the wringer.

Or stop taking federal money.

More docs denying medicare as a form of payment would be a hoot.     It's already one of the worst paying contracts out there.

[charby]

*expletive deleted*it, I may end up making a lot more money if they enforced a prevailing wage for non management jobs. I work for a University and job doesn't pay as well as private industry but benefits are little better and until this year job security was pretty much accepted.

-C

[lone_gunman]

The only potential benefit I see in this bill, is that hopefully it will make struggling companies very wary of going to Uncle Same for money.  I do not support making it retroactive, but I think some type of security should be given to tax payers.  If a company chooses to suck at the government teat, then it needs to expect to lose some autonomy.

As for the medical issue brought up, doctors are already being screwed hard by Medicare and Medicaid.  I suspect more and more doctors will quit taking those two programs over the next few years.  Quite a few already have turned down Medicaid, but most are still taking Medicare.  I doubt the government will try to cap physicians salaries, but I would not be surprised if there is a push to make accepting Medicare and Medicaid a prerequesite to obtaining a medical license.

[RadioFreeSeaLab]

Take control of any company in trouble, who has taken money from the government bailout.
Take control of any company in trouble, who has taken money from the government.
Take control of any company in trouble.
Take control of any company.

That's what it looks like to me, and it worries me.  It seems like they're beginning to desensitize the public to the government taking over corporate entities.

That's exactly correct.  These scumbags won't stop until they have control of everything.  Last month it was AIG bonuses, this week it's employee salaries.  In six months will they be controlling the wages at your company?  Will they be telling you, Mr. Small Business Owner, how much you can make from your work?

[thebaldguy]

Maybe the people need to find a way to set the salaries for elected officials. I haven't seen many that are worth what they're getting paid. I certainly don't think they deserve their annual raise.

Too bad we can't control our government.

[Headless Thompson Gunner]

Yeah, saw that coming.

[Harold Tuttle]

[HankB]

Just a bet, but with the focus on healthcare reform by this administration, I'm betting they'll float some sort of wage controls for physicians within the next couple years (likely by the end of 2009). After all, most docs accept government money from their Medicare patients and many of them fall in the >$250K bracket that is universally targeted by Obama.

At which point we'll see docs - LOTS of docs - all taking sabbaticals in the latter part of the year. After all, if you've already made all the money you're allowed to this year by the middle of June, why keep working?

[roo_ster]

At which point we'll see docs - LOTS of docs - all taking sabbaticals in the latter part of the year. After all, if you've already made all the money you're allowed to this year by the middle of June, why keep working?

Because the stalinists Bawney Fwanks, Kwiss Dawd,  & the fed.gov threaten you with imprisonment?

[trapperready]

why keep working?

Most of the docs I know feel compelled to take care of the patients, despite the reimbursement issues.

[Headless Thompson Gunner]

I know only two doctors personally.  Both were surgeons.  Both retired early, one in his 30's and one in his 40's.  They had made all the money they'd ever want, and they were tired of the stress associated with the job.

[lone_gunman]

Both were surgeons.  Both retired early, one in his 30's and one in his 40's.

I have known hundreds of surgeons, and none ever retired in their 30's.  There has to be more to the story than that.  If you graduate high school at age 18, then do 4 years of college and 4 years of medical school, you are 26 at the time you graduate medical shool, and then it takes another 5 to 7 years to do a surgery residency, plus another 2 or 3 of fellowship if you go into a specialty.  So that means at a minimum a surgeon is going to be 31 before he can enter private practice, and maybe as old as 35 or 36.

Did the guy who retired in his thirties happen to buy Microsoft or Dell stock at a good time?  Because I dont think he got rich that quick as a surgeon.

[Headless Thompson Gunner]

He worked for most of a decade, I believe.  Maybe he's in his forties and just looks really young for his age.  I dunno.  I never checked his drivers license to determine his precise age.

He started working  for our church after he left medicine.  He's the all-around fixit guy, for stuff like installing the new sound system or managing the office computers.  He also does a lot of fund raising stuff.

He wanted to do some volunteer medical work for a mission trip to Africa we sent out.  Don't know what happened exactly, but I do know that the mission went without him.  I'll have to remember to ask him next time I see him.

[trapperready]

I know only two doctors personally.  Both were surgeons.  Both retired early, one in his 30's and one in his 40's.

I know lots of doctors, probably hundreds. I'm even married to one... who happens to be a surgeon.

With very rare exception, most of her friends and colleagues continue working well into their 60's. A few have extravagant lifestyles, but the vast majority are pretty mundane.

[coppertales]

If big government set the salary of my job, I would probably get a raise....chris3

[longeyes]

There won't be a shortage of doctors, just a shortage of competent doctors.  Check the medical school admissions statistics and you'll see that "fairness" prevails, even there.

[griz]

There's an organization in this country where the starting salary for employees is almost $200K.  In addition they get health care, retirement, and many other benefits.  The company provides them and their families with fancy corporate jets for anything that remotely resembles work related travel.  Most of them have customers who are eager to write them large checks and give their family members well paying jobs too.

Do you wonder why we don't have people screaming about these cushy government jobs?  It's because we elected them to congress.

[Rudy Kohn]

"I'm not apologizing!" snapped Mouch Geithner.  "I'm not to blame.  I need wider powers."

[Monkeyleg]

We have one president, one hundred senators, and 435 congressmen telling this country to jump, and how high. These 536 people have robbed us blind, mismanaged the dollars we entrusted them with, violated their oaths of office, and are generally corrupt and inept men and women who couldn't hold down an entry level job at a fast food restaurant.

It's time to stop them by whatever means necessary before they move this country so far into the hole that recovery is impossible.

A president firing an employee of a private corporation is illegal. The legislative branch deciding how much GM gets from an open-ended bailout bill is unconstitutional. So who sues?