HR 1221 IH

Union Calendar No. 247CommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

H. R. 1221CommentsClose CommentsPermalink

[Report No. 112-366, Part I]CommentsClose CommentsPermalink

To suspend the current compensation packages for the senior executives of Fannie Mae and Freddie Mac and establish compensation for such positions in accordance with rates of pay for senior employees in the Executive Branch of the Federal Government, and for other purposes.CommentsClose CommentsPermalink

IN THE HOUSE OF REPRESENTATIVESCommentsClose CommentsPermalink

March 29, 2011CommentsClose CommentsPermalink

Mr. BACHUS (for himself, Mr. GARRETT, Mr. HENSARLING, Mr. PEARCE, and Mrs. BIGGERT) introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

January 17, 2012CommentsClose CommentsPermalink

Additional sponsors: Mr. MCCOTTER, Mr. CANSECO, Mr. ROYCE, Mr. GERLACH, Mr. WOMACK, Mr. REHBERG, Mr. ISSA, Mr. FORBES, Mr. VISCLOSKY, Mr. LOBIONDO, Mr. COFFMAN of Colorado, Mr. KISSELL, Mr. NUNNELEE, Mr. DEFAZIO, and Mrs. NOEMCommentsClose CommentsPermalink

January 17, 2012CommentsClose CommentsPermalink

Reported from the Committee on Financial Services with an amendmentCommentsClose CommentsPermalink

[Strike out all after the enacting clause and insert the part printed in italic]CommentsClose CommentsPermalink

January 17, 2012CommentsClose CommentsPermalink

The Committee on Oversight and Government Reform discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printedCommentsClose CommentsPermalink

[For text of introduced bill, see copy of bill as introduced on March 29, 2011]CommentsClose CommentsPermalink

---

A BILLCommentsClose CommentsPermalink

To suspend the current compensation packages for the senior executives of Fannie Mae and Freddie Mac and establish compensation for such positions in accordance with rates of pay for senior employees in the Executive Branch of the Federal Government, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Equity in Government Compensation Act of 2011’. CommentsClose CommentsPermalink

SEC. 2. CONGRESSIONAL FINDINGS.

The Congress finds that-- CommentsClose CommentsPermalink





(1) the Federal National Mortgage Association (known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (known as Freddie Mac), which are both privately owned but publicly chartered Government-sponsored enterprises (GSEs), were at the center of the mortgage market meltdown that caused the financial crisis that commenced in 2008; CommentsClose CommentsPermalink





(2) the failures of Fannie Mae and Freddie Mac helped precipitate the deepest economic decline since World War II; CommentsClose CommentsPermalink





(3) in September 2008, the Treasury DepartmentBush Administration, Federal Reserve Board, and Federal Housing Finance Agency (FHFA) exercised authority granted by the Congress to place the two GSEs in conservatorship, a form of nationalization that puts the regulators firmly in control of the GSEs’ daily operations; CommentsClose CommentsPermalink





(4) in September 2008, the Bush Administration established a $200 billion facility to purchase senior preferred stock in the enterprises to backstop their losses; CommentsClose CommentsPermalink





(5) in February 2009, the Obama Administration raised the senior preferred stock purchase commitment to $400 billion; CommentsClose CommentsPermalink





(6) on Christmas Eve 2009, the Obama Administration removed any limits on the use of Federal funds to cover losses at the enterprises, significantly expanding a commitment that has resulted in the expenditure of so far nearly $15075 billion in taxpayer funds to purchase senior preferred stock in the two enterprises; CommentsClose CommentsPermalink





(7) as a result of the Government’s actions, the taxpayers of the United States now own nearly 80 percent of the two GSEs; CommentsClose CommentsPermalink





(8) the Congressional Budget Office has concluded that Fannie Mae and Freddie Mac have effectively become Government entities whose operations should be included in the Federal budget; CommentsClose CommentsPermalink





(9) the GSEs are expected to be a long-term drain on the taxpayers as a result of market conditions and the political and public policy mandates imposed on them by the Administration and the Congress; CommentsClose CommentsPermalink





(10) in spite of these liabilities, the Treasury Department and FHFA approved compensation packages for the chief executive officers of Fannie Mae and Freddie Mac in 2009 and 2010, 2010, and 2011 that were nearly 15 times greater than the annual compensation of the President of the United States and 30 times greater than the annual compensation of a Cabinet Secretary; CommentsClose CommentsPermalink





(11) the Treasury Department and the FHFA also approved multi-million dollar compensation packages for a number of the GSEs’ top executives, payable in cash rather than in the type of stock options that have characterized compensation arrangements at other large financial institutions that have received extraordinary government assistance; CommentsClose CommentsPermalink





(12) on September 17, 2008, FHFA determined that no executive officer of Fannie Mae or Freddie Mac would be entitled to receive a cash bonus or long-term incentive awards for 2008; CommentsClose CommentsPermalink





(13) FHFA’s five-year Strategic Plan for Fannie Mae and Freddie Mac includes a commitment that the GSEs will operate in a safe and sound manner; and CommentsClose CommentsPermalink





(14) section 1318(c) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518(c), as added by section 1113(a)(4) of the Housing and Economic Recovery Act of 2008 (Public Law 110-289; 122 Stat. 2678)), permits the Director of FHFA to ‘withhold any payment, transfer, or disbursement of compensation to an executive officer, or to place such compensation in an escrow account, during the review of the reasonableness and comparability of compensation’. CommentsClose CommentsPermalink

SEC. 3. DEFINITIONS.

In this Act: CommentsClose CommentsPermalink





(1) DIRECTOR- The term ‘Director’ means the Director of the Federal Housing Finance Agency. CommentsClose CommentsPermalink





(2) EMPLOYEE- The term ‘employee’ means an employee of an enterprise, except that such term does not include any employee who would be defined as a prevailing rate employee (as defined insection 5342(2) of title 5, United States Code) if such employee were employed by an agency (as defined in paragraph (1) of such section). CommentsClose CommentsPermalink





(3) ENTERPRISE- The term ‘enterprise’ means-- CommentsClose CommentsPermalink





(A) the Federal National Mortgage Association and any affiliate thereof; and CommentsClose CommentsPermalink





(B) the Federal Home Loan Mortgage Corporation and any affiliate thereof. CommentsClose CommentsPermalink





(4) EXECUTIVE OFFICER- The term ‘executive officer’ has the same meaning as is given such term in section 1303(12) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502(12)). CommentsClose CommentsPermalink

SEC. 4. REASONABLE PAY FOR EXECUTIVE OFFICERS.

(a) Suspension of Current Compensation Packages- The Director shall suspend the compensation packages approved for 2011 for the executive officers of an enterprise and, in lieu of such packages, subject to the limitation under subsection (d), establish a compensation system for the executive officers of such enterprise in accordance with the rates of pay for positions in the Executive Schedule and the Senior Executive Service of the Federal Governmentschedules of compensation and benefits established and adjusted pursuant to section 1206 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b). CommentsClose CommentsPermalink





(b) Clawback of 2010 and 2011 Compensation- CommentsClose CommentsPermalink





(1) SENSE OF THE CONGRESS- It is the sense of the Congress that each executive officer performing services for an enterprise on the date of the enactment of this Act whose compensation package is suspended under this subsection (a) should return to the Secretary of the Treasury any compensation earned in 2010 and 2011 that was in excess of the maximum annual rate of basic pay authorized for a position in level I of the Executive Schedule. CommentsClose CommentsPermalink





(2) USE TO REDUCE NATIONAL DEBT- The Secretary of the Treasury shall transfer any amounts referred to in paragraph (1) that are returned to the Secretary to the special account established bysection 3113(d) of title 31, United States Code (relating to reducing the public debt). CommentsClose CommentsPermalink





(c) Additional Requirement- An executive officer of an enterprise shall be subject to section 111 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5221), which relates to executive compensation and corporate governance. CommentsClose CommentsPermalink





(d) Limitation on Compensation- An executive officer of an enterprise whose compensation package is suspended under subsection (a) shall not be compensated more than the highest compensated employee of the Federal Housing Finance Agency. CommentsClose CommentsPermalink

SEC. 5. COMPENSATION RATE OF EMPLOYEES OF FANNIE MAE AND FREDDIE MAC.

(a) In General- During any period that an enterprise is federally chartered under the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) or the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.), the compensation of the positions held by employees shall be in accordance with this section. CommentsClose CommentsPermalink





(b) Conversion of Compensation Rate for Current Employees- CommentsClose CommentsPermalink





(1) IN GENERAL- Except for as provided in section 4, effective for pay periods beginning after the date of the enactment of this Act, the Director shall fix the rate of basic compensation of positions held by employees performing services for an enterprise as of the date of the enactment of this Act in accordance with the General Schedule set forth insection 5332 of title 5, United States Code. In fixing such rate-- CommentsClose CommentsPermalink





(A) if the employee is receiving a rate of basic compensation that is less than the minimum rate of basic compensation of the appropriate grade of the General Schedule in which his or her position is placed, such employee’s rate of basic compensation shall be increased to such minimum rate; CommentsClose CommentsPermalink





(B) if the employee is receiving a rate of basic compensation that is equal to a rate of basic compensation of the appropriate grade of the General Schedule in which his or her position is placed, such employee’s rate of basic compensation shall be equal to that rate of basic compensation of the appropriate grade of the General Schedule; CommentsClose CommentsPermalink





(C) if the employee is receiving a rate of basic compensation that is between 2 rates of basic compensation of the appropriate grade of the General Schedule in which his or her position is placed, such employee’s rate of basic compensation shall be at the higher of those 2 rates under the General Schedule; and CommentsClose CommentsPermalink





(D) if the employee is receiving a rate of basic compensation that is in excess of the maximum rate of basic compensation of the appropriate grade of the General Schedule in which his or her position is placed, such employee’s rate of basic compensation shall be reduced to such maximum rate. CommentsClose CommentsPermalink





(2) NOT CONSIDERED TRANSFERS OR PROMOTIONS- The conversion of positions and employees to the appropriate grades of the General Schedule and the initial adjustment of rates of basic compensation of those positions and employees provided for by this subsection, shall not be considered to be transfers or promotions within the meaning ofsection 5334(b) of title 5, United States Code, and the regulations issued thereunder. CommentsClose CommentsPermalink





(3) CREDIT FOR INCREASE IN COMPENSATION BEFORE ADJUSTMENT- Each employee performing services for an enterprise on the date of the enactment of this Act whose position is converted under this subsection to the General Schedule and who prior to the initial adjustment of his or her rate of basic compensation under paragraph (1) has earned, but has not been credited with, an increase in that rate, shall be granted credit for such increase before his or her rate of basic compensation is initially adjusted under such paragraph. CommentsClose CommentsPermalink





(4) SERVICE PERFORMED SINCE LAST COMPENSATION INCREASE- Each employee performing services for an enterprise on the date of the enactment of this Act whose position is converted under this subsection to the General Schedule shall be granted credit, for purposes of his or her first step increase under the General Schedule, for all satisfactory service performed since his or her last increase in compensation prior to the initial adjustment of his or her rate of basic compensation under paragraph (1). CommentsClose CommentsPermalink





(5) COMPENSATION INCREASE UNDER THIS SECTION- An increase in the rate of basic compensation by reason of the enactment of paragraph (1) shall not be considered to be an equivalent increase with respect to step increases for employees whose positions are converted to the General Schedule under authority of this subsection. CommentsClose CommentsPermalink





(c) New Employees- Except for as provided in section 4, the grade and rate of basic pay of any individual beginning employment with an enterprise after the date of enactment of this Act shall be fixed in accordance with the General Schedule set forth insection 5332 of title 5, United States Code. CommentsClose CommentsPermalink

SEC. 6. FANNIE AND FREDDIE EMPLOYEES NOT FEDERAL EMPLOYEES.

Any executive officer or employee affected by any provision under sections 4 and 5, respectively, shall not be considered a Federal employee. CommentsClose CommentsPermalink

Union Calendar No. 247CommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

2d SessionCommentsClose CommentsPermalink

H. R. 1221CommentsClose CommentsPermalink

[Report No. 112-366, Part I]CommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To suspend the current compensation packages for the senior executives of Fannie Mae and Freddie Mac and establish compensation for such positions in accordance with rates of pay for senior employees in the Executive Branch of the Federal Government, and for other purposes.CommentsClose CommentsPermalink

---

January 17, 2012CommentsClose CommentsPermalink

Reported from the Committee on Financial Services with an amendmentCommentsClose CommentsPermalink

January 17, 2012CommentsClose CommentsPermalink

The Committee on Oversight and Government Reform discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printedCommentsClose CommentsPermalink