[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1221 Reported in House (RH)]
Union Calendar No. 247
112th CONGRESS
2d Session
H. R. 1221
[Report No. 112-366, Part I]
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 29, 2011
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 concerned
January 17, 2012
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. Noem
January 17, 2012
Reported from the Committee on Financial Services with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
January 17, 2012
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 printed
[For text of introduced bill, see copy of bill as introduced on March
29, 2011]
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Equity in Government Compensation
Act of 2011''.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that--
(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;
(2) the failures of Fannie Mae and Freddie Mac helped
precipitate the deepest economic decline since World War II;
(3) in September 2008, the Bush 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;
(4) in September 2008, the Bush Administration established
a $200 billion facility to purchase senior preferred stock in
the enterprises to backstop their losses;
(5) in February 2009, the Obama Administration raised the
senior preferred stock purchase commitment to $400 billion;
(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 $175 billion in
taxpayer funds to purchase senior preferred stock in the two
enterprises;
(7) as a result of the Government's actions, the taxpayers
of the United States now own nearly 80 percent of the two GSEs;
(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;
(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;
(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, 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;
(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;
(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;
(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
(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.
SEC. 3. DEFINITIONS.
In this Act:
(1) Director.--The term ``Director'' means the Director of
the Federal Housing Finance Agency.
(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 in section 5342(2) of title 5, United States Code) if
such employee were employed by an agency (as defined in
paragraph (1) of such section).
(3) Enterprise.--The term ``enterprise'' means--
(A) the Federal National Mortgage Association and
any affiliate thereof; and
(B) the Federal Home Loan Mortgage Corporation and
any affiliate thereof.
(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)).
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 schedules 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).
(b) Clawback of 2010 and 2011 Compensation.--
(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 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.
(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 by section 3113(d) of title 31, United States Code
(relating to reducing the public debt).
(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.
(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.
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.
(b) Conversion of Compensation Rate for Current Employees.--
(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 in section
5332 of title 5, United States Code. In fixing such rate--
(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;
(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;
(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
(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.
(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 of section 5334(b) of title 5,
United States Code, and the regulations issued thereunder.
(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.
(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).
(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.
(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 in section 5332 of title
5, United States Code.
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.
Union Calendar No. 247
112th CONGRESS
2d Session
H. R. 1221
[Report No. 112-366, Part I]
_______________________________________________________________________
A BILL
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.
_______________________________________________________________________
January 17, 2012
Reported from the Committee on Financial Services with an amendment
January 17, 2012
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 printed