Lawmakers Confront Executives Over Fannie Mae and Freddie Mac Bonuses
{{#rendered}} {{/rendered}}Congress was already unhappy about spending some $170 billion to bail out Fannie Mae and Freddie Mac, the quasi-federal agencies that own or guarantee about half the nation's mortgages.
When Congress learned that 12 executives at Fannie and Freddie were paid some $35 million in salary and bonuses over the last two years, that was the last straw.
"These bonuses have come just as Freddie and Fannie have asked for an additional $13 billion in handout from the taxpayers," Committee Chairman Darrell Issa, R-CA, said.
{{#rendered}} {{/rendered}}"Surely you can understand the frustration of taxpayers," Trey Gowdy,R-SC, said " paying bonuses while the bus is driven through the gates of hell and then you want us to pay bonuses while the people change the tires."
"I'm mystified as to why these so-called achievements should entitle executives to a million dollar bonus," William Lacy Clay, D-MO, said, expressed the sentiment of many.
A house committee has voted 52-4 to stop those bonuses and any future ones, as well as reduce executive pay to standard federal levels.
{{#rendered}} {{/rendered}}Charles Haldeman, the head of Freddie Mac said today he understands the outrage over executive compensation.
"We have 9 percent unemployment in our country, and there are millions of families at risk of losing their homes. I understand the outrage," he said.
The federal official who oversees them, Ed DeMarco, head of the Federal Housing and Finance Agency, said he has to pay more to get the best people in hopes of minimizing taxpayer losses.
{{#rendered}} {{/rendered}}"Others may believe this sort of talent is easily and quickly hired at compensation far below that of competing private firms, but I do not," DeMarco said.
DeMarco went on to describe the enormity of what they're dealing with -- trying to maintain continued access to mortgage loans while trying to unwind millions of bad ones.
"I need to ensure that the enterprises have people with the skills needed to manage $5 trillion worth of mortgage assets and $1 trillion of annual new business that the American taxpayer is supporting," he explained.
{{#rendered}} {{/rendered}}DeMarco noted that Fannie and Freddie have guaranteed three out of four mortgage loans since the government started bailing them out in 2009.
This entire episode is uncomfortable for the Obama administration which has been sharply critical of bonuses for private sector executives.
So much so, that Chairman Issa played some of President Obama's remarks about AIG, which also gave out bonuses while it was being bailed out.
{{#rendered}} {{/rendered}}"I see reports of massive profits and obscene bonuses in some of the very firms who owe their continued existence to the American people," Obama said.
Chairman Issa also played another Obama comment from "60 Minutes," in which he said, "I did not run for office to be helping out a bunch of, you know, fat cat bankers on Wall Street."
But under questioning, all three officials today said that they have heard nothing from the White House about the compensation issue, which one Republican found odd.
"This is interesting because there has been a hue and cry from -- from the president in particular, about executive compensation," Patrick McHenry, R-NC, said. "And it is somewhat strange to me that in an area where he could exert influence, he has chosen not to."
{{#rendered}} {{/rendered}}The President also said only companies that pay the government back can give out bonuses.
DeMarco said today that Fannie and Freddie are making progress, but are unlikely to ever pay back all the taxpayer support.