More
Mussolini-style corporatism from Capitol Hill Democrats.
The House Financial Services Committee, chaired by Rep. Barney
Frank (D-People's Republic of Massachusetts), has approved
legislation handing Treasury Secretary Timothy
Geithner extensive control over salaries of employees who
work for businesses that take in government bailout
funds.
As Byron York of the Washington Examiner
reports
[I]n 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.) [...]
