[Congressional Record (Bound Edition), Volume 155 (2009), Part 7]
[House]
[Pages 9520-9526]
[From the U.S. Government Publishing Office, www.gpo.gov]




   PROVIDING FOR CONSIDERATION OF H.R. 1664, PAY FOR PERFORMANCE ACT

  Mr. PERLMUTTER. Madam Speaker, by direction of the Committee on 
Rules, I call up House Resolution 306 and ask for its immediate 
consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 306

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 1664) to amend the executive compensation 
     provisions of the Emergency Economic Stabilization Act of 
     2008 to prohibit unreasonable and excessive compensation and 
     compensation not based on performance standards. The first 
     reading of the bill shall be dispensed with. All points of 
     order against consideration of the bill are waived except 
     those arising under clause 9 or 10 of rule XXI. General 
     debate shall be confined to the bill and shall not exceed one 
     hour equally divided and controlled by the chair and ranking 
     minority member of the Committee on Financial Services. After 
     general debate the bill shall be considered for amendment 
     under the five-minute rule. It shall be in order to consider 
     as an original bill for the purpose of amendment under the 
     five-minute rule the amendment in the nature of a substitute 
     recommended by the Committee on Financial Services now 
     printed in the bill. The committee amendment in the nature of 
     a substitute shall be considered as read. All points of order 
     against the committee amendment in the nature of a substitute 
     are waived except those arising under clause 10 of rule XXI. 
     Notwithstanding clause 11 of rule XVIII, no amendment to the 
     committee amendment in the nature of a substitute shall be in 
     order except those printed in the report of the Committee on 
     Rules accompanying this resolution. Each such amendment may 
     be offered only in the order printed in the report, may be 
     offered only by a Member designated in the report, shall be 
     considered as read, shall be debatable for the time specified 
     in the report equally divided and controlled by the proponent 
     and an opponent, shall not be subject to amendment, and shall 
     not be subject to a demand for division of the question in 
     the House or in the Committee of the Whole. All points of 
     order against such amendments are waived except those arising 
     under clause 9 or 10 of rule XXI. At the conclusion of 
     consideration of the bill for amendment the Committee shall 
     rise and report the bill to the House with such amendments as 
     may have been adopted. Any Member may demand a separate vote 
     in the House on any amendment adopted in the Committee of the 
     Whole to the bill or to the committee amendment in the nature 
     of a substitute. The previous question shall be considered as 
     ordered on the bill and amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.

  The SPEAKER pro tempore. The gentleman from Colorado is recognized 
for 1 hour.
  Mr. PERLMUTTER. Madam Speaker, for purposes of debate only, I yield 
the customary 30 minutes to the gentlewoman from North Carolina, Dr. 
Foxx. All time yielded during consideration of the rule is for debate 
only.
  I yield myself such time as I may consume.


                             General Leave

  Mr. PERLMUTTER. I also ask unanimous consent that all Members be 
given 5 legislative days in which to revise and extend their remarks on 
House Resolution 306.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Colorado?
  There was no objection.
  Mr. PERLMUTTER. Madam Speaker, House Resolution 306 provides for 
consideration of H.R. 1664 to amend the executive compensation 
provisions of the Emergency Economic Stabilization Act of 2008 to 
prohibit unreasonable and excessive compensation and compensation not 
based on performance standards.
  This is under a structured rule. The rule provides for 1 hour of 
general debate controlled by the Committee on Financial Services. The 
rule makes in order seven amendments which are listed in the Rules 
Committee report accompanying the resolution. Each amendment is 
debatable for 10 minutes except the manager's amendment, which is 
debatable for 20 minutes. The rule also provides for one motion to 
recommit with or without instructions.
  Madam Speaker, the American people rightfully demand that the 
taxpayer dollars they put in to help stabilize the banking system be 
spent wisely by the banks and by the institutions that borrow under 
what is called the Troubled Asset Relief Program, or TARP.
  Recently, when information came to light showing AIG gave, roughly, 
$165 million in retention bonuses to senior executives, hardworking 
Americans all across the country quickly asked, How as a Nation can we 
recover this money? Now the House considers a similar question: How do 
we reasonably prevent this from happening again?
  The grounds for this action are simple. As the lender to AIG and to a 
number of other institutions, the United States has the authority to 
define the terms by which we are lending money. This is a standard in 
business practice, as lenders from time to time put limits on executive 
compensation, as do their shareholders.
  The gentleman from Georgia (Mr. Marshall) recently related to me that 
you have to be just before you are generous, that you have to take care 
of your creditors before you can pass out gifts. In this case, 
generosity, or generous, is taken to a whole new level with the 
retention bonuses that we saw recently. We as Members of Congress must 
assert our rights to protect our constituents and the people of this 
country from any further losses. I want to make clear several things 
about this bill:
  First, it only applies to financial institutions that have received a 
capital infusion under the TARP program. An amendment by Representative 
Bilirakis will clarify this point, and an amendment by Representative 
Cardoza would exempt smaller community banks which receive TARP funds.

[[Page 9521]]

  Second, it only prohibits compensation that is unreasonable or 
excessive or prohibits any bonus or other supplemental payment that is 
not performance-based. Guidelines are established by the Treasury 
Department within which to determine what is unreasonable or excessive.
  Third, the bill only applies while the TARP capital remains 
outstanding. Once the institution has paid the taxpayers back, they may 
meet any contractual obligations allowed by their board of directors 
and shareholders regarding bonuses.
  I support the private sector, and I believe in rewarding employees 
for doing a good job. This bill does allow for performance 
compensation, but if you have received a capital investment of American 
tax dollars through TARP to make it through these extraordinary times, 
there should be commonsense limits on bonuses. My constituents in 
Colorado do not want their hard-earned dollars going to inflate the 
senior executives' life rafts as the ship steers close to the rocks.
  We are going through this economic downturn, but we need to make sure 
that middle-class America can trust the money that has been placed into 
the banking system to keep that system functioning properly. If an 
institution has an outstanding debt to the Federal Government, it has 
to pay it back before it gets bonuses that are excessive or 
unrealistic.
  I urge my colleagues to vote in favor of the rule and the underlying 
bill.
  With that, I reserve the balance of my time.
  Ms. FOXX. Madam Speaker, I yield myself such time as I may consume. I 
appreciate my colleague from Colorado yielding time.
  This is another very deceptively named bill by our colleagues on the 
other side. It is a fairly short bill, only four pages long, so 
everyone should have a chance to read it, and that is an important 
thing to do.
  It is titled ``to amend the executive compensation provisions of the 
Emergency Economic Stabilization Act of 2008 to prohibit unreasonable 
and excessive compensation and compensation not based on performance 
standards.''
  Now, again, that sounds great. However, when you get inside the bill 
and you read it, it says, ``any executive or employee,'' and it says 
that four times, so the deception is that this is only for executives. 
It is not just for executives. It allows the Treasury Department to set 
the salaries and compensation for all employees in a private 
organization. This is wrong to do.
  We have had so many statements that have been made that have been 
misleading, I think, on the floor. This is not the worst economic 
crisis since the Depression. Our situation in the country was much 
worse in the eighties after a Democratically controlled Congress and a 
Democratic Presidency. So we are in a situation that has been created, 
again, by Democrats. Yet they want to say over and over again that this 
is the problem of a Republican administration. We have to constantly 
point out the fact that the Congress has been controlled for the past 2 
years and is now controlled by Democrats.
  So I think this rule is bad; I think the underlying bill is bad, and 
I think that our colleagues should vote against both of them.
  What the Democrats are doing now is, again, providing political cover 
for Democrat Members of the House who voted for a bad bill a couple of 
weeks ago, and they are trying to change the subject from the 
administration's failure to exercise adequate oversight of the taxpayer 
dollars which have been extended to prop up AIG, American International 
Group. So I expect most of my colleagues, if not all, to vote against 
this rule and to vote against the underlying bill.
  We also have a situation where this is not an open rule. The majority 
continues its practice of limiting debate and of limiting opportunities 
for Republicans to offer amendments and to do whatever we can do to 
make a bad bill somewhat better or to make a bad rule somewhat better. 
So we have a situation where these things continue.
  You know, when I have thought about this, I have thought about just a 
commonsense way to describe this to people. The Democrats have a tar 
baby on their hands, and they simply cannot get away from it. They are 
stuck on this problem. They have created a bad situation, and every 
time they try to get away from it, they keep getting stuck on it, and I 
think that this is just the latest iteration and bad policy that they 
are recommending, and I am going to recommend to my colleagues to vote 
against it.
  I reserve the balance of my time.
  Mr. PERLMUTTER. I yield myself such time as I may consume.
  Madam Speaker, I would like to respond to my friend from North 
Carolina. I just have to remind her that it was President Bush's 
Secretary of the Treasury who came to the Congress, hat in hand, 
because of a potential collapse of the financial system, asking for 
immediate assistance from this Congress to right the financial system, 
to put it back on some sort of stable footing. Since then, we have seen 
a variety of financial institutions take advantage of the assistance 
that was given. This is designed to restrict the way companies can take 
advantage of taxpayer dollars until they have repaid the loans and 
capital that have been advanced to these companies.
  With that, I would like to yield 2 minutes to my friend from New York 
(Mr. Arcuri).

                              {time}  1130

  Mr. ARCURI. I thank the gentleman for yielding.
  Madam Speaker, these past few months have confronted us with some of 
the most difficult economic choices we have faced in the Nation in 
recent memory. As job reports continue to show thousands of new layoffs 
each month and unemployment numbers in my district hover above 10 
percent, I am outraged that the very individuals who have contributed 
to this financial disaster are rewarding themselves with hard-earned 
taxpayer money intended to get our economy moving again.
  We have been called to action to see that those responsible are held 
accountable and not rewarded. This bill does just that. It ensures that 
these TARP-taking executives are paid based on the work that they do, 
not paid for the work they didn't do.
  You know, I listen to my colleagues from the other side of the aisle 
talk, and I guess I understand that some people are critical of AIG. 
Certainly we understand that. We all are critical of the AIG top 
executives. I even respect the opinions of those who are critical of 
this bill.
  The thing that I don't understand is how you can be critical of both. 
You really can't. If you are critical of what happened at AIG, then you 
have to say that this is exactly the kind of thing that Congress should 
be doing. We should be going in and we should be regulating. We should 
be exercising the oversight that our constituents sent us here to 
Congress to do.
  This is a commonsense piece of legislation that reflects the values 
of this Nation and the very same lessons that we hold in our 
communities and teach to our children. We will not sit idly by as this 
money is practically being taken from the American people instead of 
being used to restore confidence in this Nation as it was intended.
  Madam Speaker, we owe it to our constituents and to our children and 
to our grandchildren to do everything we can to bring justice where it 
is lacking and repair it so we have a clear road to success.
  Ms. FOXX. Madam Speaker, I am intrigued at my colleagues being 
outraged. Well, my goodness. If you were so outraged, why did you vote 
for these things to begin with? You know, your hands are not clean. I'm 
sorry, but your hands are not clean when you say that you are outraged.


                             Point of Order

  Mr. PERLMUTTER. Madam Speaker, point of order.
  The SPEAKER pro tempore. The gentleman from Colorado will state his 
point of order.
  Mr. PERLMUTTER. I would ask my friend to address the Speaker.
  The SPEAKER pro tempore. The gentlewoman from North Carolina will 
address her remarks to the Chair.

[[Page 9522]]


  Ms. FOXX. Thank you, Madam Speaker.
  Madam Speaker, I wonder why my colleagues are so outraged when they 
voted for these bills. This is covering up their previous action. They 
are trying to make something better. As I said, they've got a tar baby 
on their hands and they don't know what to do with it.
  Well, it's easy to say that you could criticize the AIG executives 
for taking the money and criticize people for having voted for these 
things and be against this bill because it is taking our government in 
the wrong direction.
  I am also very puzzled at my colleagues saying they are so concerned 
about their children and their grandchildren. But I will bet most of 
them are going to vote for this budget a little later on today, and 
they are quite willing to put the debt of this country on the backs of 
their children and grandchildren.
  I think those are crocodile tears that they're crying when they say 
they want to preserve this country for their children and 
grandchildren. Give me a break.
  In the headlines today in one of the rags here on the Hill--``Senator 
Levin Considers Defense Executive Pay Cuts.'' Where is this going to 
end? Our colleagues in this administration think they have all the 
answers. They're going to run this country from the government down to 
every single business in the country: ``Let's just cut their pay. 
They're getting money from the government.'' Where is it going to end?
  Are we going to have a President--he's already running GM. He's now 
the executive in chief of GM. And so our colleagues want to take on 
every single entity in this country and say, We know best. The 
government knows best. We're from Washington and we're here to help 
you. The American people have heard that before. They are not going to 
be fooled again by this kind of comment.
  And, I'm sorry, but, again, I think it's crocodile tears when they 
say they are concerned about their children and grandchildren. If they 
are, they'll all vote ``no'' on the budget a little later on today and 
show their true concern. Saying that this upholds the rule of law for 
their children and grandchildren? Again, give me a break.
  I reserve the balance of my time.
  Mr. PERLMUTTER. Madam Speaker, I would like to respond to my good 
friend from North Carolina just to remind her that when Secretary 
Paulson came to the Congress asking for $700 billion, he brought us a 
three-page document. The first page said, I need $700 billion. The 
second page said, I can do anything with it I want. And the third page 
said, You can't sue me.
  Well, we took that in a crunch time based on his--not his demands, 
his pleas, his pleas to the Congress to act quickly to preserve our 
banking system because so many things were going wrong all at one time. 
We took that three pages, which was completely ridiculous----
  Ms. FOXX. Would the gentleman yield?
  Mr. PERLMUTTER. Let me finish.
  Which was completely ridiculous. We expanded it to a hundred pages, 
and acted promptly at the request of President Bush and his 
administration to try to get our financial system stabilized. And it is 
still rocky, but it's going. But we've seen certain companies take 
advantage of the assistance of the people of America, and we've got to 
prevent that. This bill is about compensation where it's excessive or 
not based upon performance.
  What I would like to do now, though, is turn it over to my friend 
from Virginia (Mr. Moran), and I would yield him 3 minutes.
  Mr. MORAN of Virginia. Madam Speaker, I was not intending to speak, 
but it does seem to me there should be some historical accuracy within 
the Congressional Record. And while the gentlelady from North Carolina 
is certainly entitled to her own set of opinions, she is not entitled 
to her own set of facts. So let me review some of the facts in terms of 
the economic history she purported to describe.
  I agree that we did have a substantial fiscal crisis in the 1980s, 
but it was the Bush administration that has told us that today we are 
faced with the most severe fiscal crisis since the Great Depression.
  Now in the 1980s, President Ronald Reagan was elected on a platform 
that any President who submitted an unbalanced budget should be 
impeached. Well, not only did he never balance any budget that he 
submitted, he tripled the national debt. Every single budget was 
unbalanced.
  President Bush, the 41st President--referred to as Papa Bush or 
whatever; it's important to distinguish between the two--in 1990, 
realizing how bad the Republicans' supply-side gimmickry had failed, 
what damage it had done to the economy, he brought the Democratic 
leaders and the Republicans together and came up with a fiscal plan. 
That plan put together by the 41st President, formed the foundation of 
fiscal responsibility for the next decade. It was called PAYGO. And it 
worked. Basically, you don't cut taxes unless you cut spending and vice 
versa. You don't increase spending unless you raise that same amount of 
revenues.
  So we implemented that, and then President Clinton came in, passed a 
balanced budget, adopted that President Bush the 41st PAYGO concept, 
and, in fact, balanced the budget. That produced surpluses. And, in 
fact, at the end of the Clinton administration, he handed over $5.6 
trillion of projected surplus based upon this concept of fiscal 
responsibility.
  President Bush took it--this is the 43rd President now--takes that 
$5.6 trillion and immediately started squandering it by negating the 
concept of PAYGO. One of the first things that was done by the 
immediate past-Bush administration was to say, ``We are no longer going 
to be bound by PAYGO concepts. We'll cut taxes and we'll increase 
spending.'' They started a war of choice that cost us $1 trillion--not 
one dime was ever paid for--and then passed two tax cuts which have 
cost trillions of dollars, $3.5 trillion. Not one dime was ever cut to 
pay for that, either.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. PERLMUTTER. I yield the gentleman an additional 1 minute.
  Mr. MORAN of Virginia. So here we are now with the largest deficit we 
have ever faced, a deficit that is greater than the deficit created by 
all the previous Presidents in American history, and basically it was 
because we had a Congress of the same party as the White House who got 
all the spending programs they wanted, primarily in the defense area, 
and cut all the taxes they chose.
  Now, of course, the money was not well distributed, and that's one of 
the problems. It went to the wealthiest people in the country. In fact, 
one of our problems is that more than 90 percent of the income growth 
that has occurred over the last 8 years went to the top 10 percent. 90 
percent of this country's wealth is now controlled by 1 percent of our 
population. And that's one of the reasons why the bottom 90 percent had 
to borrow from their assets, their equities, their homes which created 
this bubble.
  But the point is, there was a lack of fiscal responsibility, and that 
is what is plaguing us today. This President is trying to reinvest in 
the American people, ultimately balance the budget and put us back on 
the course that President Clinton set us on and that Democrats want to 
put us back on.
  Ms. FOXX. Madam Speaker, I have said on the floor several times in 
the last few weeks that the public needs to be reading or rereading the 
book ``1984'' because we're here in a period where the Democrats 
continue to rewrite history.
  I would like to, just again, say to my colleague from Virginia that 
he wants to say we have the largest deficit we've ever had. Absolutely. 
Because the Democrats have been in control of Congress for the past 2 
years. The President does not pass a budget, does not pass 
appropriations bills. The President can either sign or reject 
appropriations. The appropriations bills were not passed last year 
because they knew that President Bush would reject them, he would veto 
them, and so they didn't pass them. We did them this spring. That's 
what caused the largest deficit.

[[Page 9523]]

  We have a Democratic President and a Democratically controlled 
Congress, and you cannot rewrite history in that way. We had a very 
small deficit when we had a Republican Congress and a Republican 
President.
  With that, I yield 5 minutes to my colleague from Missouri (Mr. 
Blunt).
  Mr. BLUNT. Madam Speaker, I don't blame my good friend from Virginia 
for not wanting to talk about the bill today. If I were him, I wouldn't 
want to talk about it either. I oppose this bill. I oppose this rule.
  I was not particularly concerned a few days ago when we were sending 
a message to AIG and the executives at AIG, the high-paid executives 
there. I think every once in a while the Congress can send a message, 
and it is a good thing to send that message. This is a company that 
taxpayers now own 80 percent of. If that's not a definition of 
bankruptcy, I don't know what is. In bankruptcy, it's okay to look at 
the commitments you made in the past.
  Now I am afraid--by the way, the AIG executives apparently got the 
message because many of them have returned that bonus money back to the 
taxpayers who gave it to the company. I thought that was okay to send 
that message. We were way ahead of any constitutional concern. There 
was no Senate action. The President wasn't about to sign a bill. We 
were sending a message. They got the message.
  I think the problem with that message may be that some of our own 
Members got a different message, which is it's somehow okay for the 
government to decide that they can decide salaries and how to run 
companies. You know, the government can barely run the government. The 
government this week has announced we're going to run the auto 
industry. The auto industry is in trouble. If I were picking a group of 
folks to run it, it wouldn't be the government. But the government is 
there.
  And now we've got this bill on the floor that suggests somehow that 
the government can set salaries at what I would see as not only the 
high level that we tried to take care of last fall in a bill. And 
apparently the stimulus package that came through had language in it 
that reversed some of that language and made these bonuses at the 
higher level possible to be paid. I regret that. I am glad I didn't 
vote for that stimulus bill. I'm glad that I didn't do anything that 
enabled that.
  I am not going to vote for this bill today. It is all we can do to 
run the government and to try to tell these companies how to pay the 
people that work for them is not the right thing to do. I mean, as late 
as last April, the chairman of the Banking Committee in the House that 
deals with housing, the chairman of the Housing Committee in the Senate 
were both saying as late as last April that Fannie Mae and Freddie Mac 
didn't need to be reined in. They were saying as late as last April 
that these agencies needed even more ability to loan more money.
  If we could be that wrong that close to the precipice that we went 
off in the summer and fall, imagine how wrong we could be running a 
company that doesn't even have any relationship to what the government 
does every day.

                              {time}  1145

  This is a bad bill. It's a bad rule. We should not move forward with 
this rule and not move forward with this bill.
  Mr. PERLMUTTER. Madam Speaker, I will use so much time as I might 
consume, and I'd like to remind my friend from Missouri, first of all, 
the first time any kind of regulation over Fannie Mae and Freddie Mac 
was proposed was in this Congress, was by the House of Representatives, 
as early as March of 2007 to provide some regulation to those two 
entities.
  The second thing I would remind my friend--and I appreciate his 
comments about, you know, the shot across the bow of the AIG executives 
and the fact that they are returning some of the money--but I would 
also remind him that in the business world, a lender in making a loan 
to a company may, as part of that loan agreement, put limits on 
compensation to the executives until that loan is repaid. That's a 
standard operating procedure in the business world, and shareholders do 
that, too.
  So a board of directors of a company may be restricted by an outside 
influence like a lender or by its own shareholders. In this instance, 
we are placing a lot of money into many institutions across this 
country, and I believe the people of this country have some say as to 
what the compensation should be of those institutions until those loans 
or that capital is repaid.
  Now, there may be something that might make the gentleman from 
Missouri a little happier, and that is, there is an amendment that will 
be proposed, I believe it's an amendment by Mr. Cardoza, that will 
exempt, in effect, institutions that have received less than, I think 
it's $250 million, which is still a lot of money. But small community 
banks, smaller financial institutions will not be part of the program, 
if that amendment is accepted.
  Mr. BLUNT. Would the gentleman yield?
  Mr. PERLMUTTER. Certainly.
  Mr. BLUNT. Thank you for yielding.
  I just say that on that broader topic of reform of those GSEs, 
certainly there was legislation proposed in 2007. It wasn't passed. The 
President of the United States called for legislation every year 
beginning in 2001.
  The point is that the Congress can barely run the government, let 
alone try to put a matrix together and run these companies in minute 
detail. The very fact that we're going to have all these amendments 
today indicates that, once again, we're rushing to the floor with a 
bill that shows maybe the Congress is not the best daily governing 
officer of the businesses of America.
  I thank my friend for yielding.
  Mr. PERLMUTTER. Thank you. And I would just respond to my friend from 
Missouri by saying that we, at least in this House, passed the GSE 
reform bills twice, once in 2007 and again in 2008, at which time the 
President signed it in the summer of 2008.
  Secondly, I would just say that the financial sector has been in a 
heap of trouble, and without the assistance of the people and this 
government, they would be in worse trouble today. That is my belief, 
and I think that would be the record reflected by many experts across 
the country.
  With that, I reserve the balance of my time.
  Ms. FOXX. Madam Speaker, our colleagues on the other side keep 
bringing up Secretary Paulson, but they leave out the fact that the 
current Secretary of the Treasury was the head of the New York Fed at 
the same time and was standing right beside Secretary Paulson when 
those recommendations were made.
  It also was under his watch that the amendment to allow the bonuses 
to AIG was done, and we know from statements that Senator Dodd has made 
that he was directed to do that by the Treasury Department. So, again, 
we're not going to be saddled with the problems they created. They've 
got a tar baby. They're not going to shift it off to the Republicans.
  I'd now like to yield 4 minutes to the gentleman from Georgia (Mr. 
Kingston), my colleague.
  Mr. KINGSTON. I thank the gentlewoman for yielding, and I want to 
just say at the outset I have a number of problems with this, but in 
terms of bringing up Mr. Paulson, I did not vote for the first TARP 
program nor did I vote for the second one, but at least Mr. Paulson did 
pay his taxes. And I think most Americans know that we have a man in 
charge of the Treasury who was appointed by Mr. Obama who did not pay 
his taxes. And to hold him up as a standard over and over again I think 
is ironic for the Democrat Party. In fact, if I was a member of the 
Democrat Party, I'd have a little squeamishness myself before I 
embraced Mr. Geithner and all of the wonderful things that you believe 
he's going to do for this country.
  Having said that, even though he did not pay his taxes, I hope he is 
successful because we need to turn the economy around, and the 
Republican Party certainly is going to help any way we can and work on 
a bipartisan basis to do that.
  I have some real concerns about H.R. 1664, however. Number one, the 
institutions who signed up for it understood

[[Page 9524]]

that there were certain rules that they would abide by, certain 
understandings, and now that has changed, this is going back and making 
the rules different for them. And that is one of the things that this 
administration is most guilty of I think is constantly changing the 
rules.
  The market needs to react. If the market knows the rules are here, or 
they're here and they're left or they're right but they're poured in 
concrete, then the market can start making adjustments. But as it is, 
this Congress is obsessed with each week reading a new poll and coming 
out with a new rule, and because of that instability, the market will 
never normalize. The market has to become comfortable with the rules so 
that they can adjust and live in that environment, but if we keep 
changing them, we are still going to have instability in the market.
  Secondly, this is overly broad. It applies to all employees rather 
than the top executives, and I know that many in the Democrat Party see 
this as a delicious opportunity to beat up on executives, successful 
people who pay high taxes, the rich and the wealthy who seem to be so 
maligned by the left. But this applies to all employees. Now, the 
gentleman mentioned that there might be a Cardoza amendment that's 
going to make some changes in this, maybe eliminate some of the 
companies that would be qualified for it. I'm interested in that 
amendment and look forward to that debate.
  Number three, this is really all about AIG, and the fact that Mr. 
Dodd, the Democrat chairman of the Senate Banking Committee, had taken 
out the language which was put in by Republican Olympia Snowe that 
would have eliminated the AIG bonuses. Mr. Dodd purposely, under the 
instruction, according to him, not me, under the instruction of the 
Obama administration, took that out.
  So now we're crawfishing--I'm not sure if you have crawfish out in 
Colorado, my friend, but crayfish, either way, but you know how they 
swim, when they're scared they put the tail in, they go backwards. And 
I think there are Members of the Democrat Party right now who are 
crayfishing or crawfishing, and they're doing it for Mr. Dodd's 
politics. Nobody in the House was aware of that negotiation and the 
language, but I think this is all about AIG, and this is a political 
decision.
  You know, we've got a really smart administration right now, one 
that's on the side of fighting the war, can turn around the car 
industry, can turn around the banking industry, turn around the 
insurance industry, and guarantees us the efficiency of the post office 
and FEMA as an end result, as the standard that we've got to live by.
  This is a bill that actually has some good intentions, something that 
we're all frustrated about. We do not want to reward inefficiency, but 
unfortunately, the government and these companies got in bed together, 
and now they're trying to live in that framework, and the government 
keeps changing the rules.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. FOXX. Madam Speaker, I would be happy to give the gentleman 2 
more minutes.
  Mr. KINGSTON. I thank the gentlewoman, and I just want to say this.
  One other thing that Mr. Geithner recently announced is this public-
private partnership to buy the toxic assets, now legacy assets, of 
banks, and the idea is to get the public sector and the private sector 
to take all this bad real estate off the books of financial 
institutions so that we can get a bottom, so that we can get a market, 
so that we can get them off the taxpayers.
  But unfortunately, if you are a public-private kind of entrepreneur 
who might want to put together a deal like this, you're saying, you 
know, do I really want to do this when the government is going to come 
back and change my compensation? I think most people would say, you 
know, if these folks actually have to make as much money as some of the 
leading Democrats of the world like Barbra Streisand and George Soros, 
some of the big donors in your area, you know, if we have to pay them 
but they can do the job right, they can turn around AIG--which I think 
probably it's too late for that--maybe it's worth it because, after 
all, we are paying a lot of people to play professional sports and star 
in movies and things like that.
  So maybe it's worth it to pay people high salaries to turn around the 
financial institutions, which have a ripple effect throughout our 
housing and our credit system and our banking system. It might be 
something that we should do. But I just think that this bill is a 
politically motivated bill and not a sound economic bill in the current 
situation.
  So, with that, I certainly appreciate the gentlewoman for yielding.
  Mr. PERLMUTTER. Madam Speaker, I yield myself such time as I might 
consume.
  I would just advise my friend, Mr. Kingston, that take a look at the 
bill. It's a very simple bill. My friend from North Carolina was 
correct, and it just basically says no financial institution, while it 
has money that's taxpayer money through TARP or otherwise, can pay 
excessive compensation or anything other than performance bonuses. An 
executive cannot hold the company hostage, as was done in the AIG 
instance.
  And if and when that money's paid back, then fine, the board of 
directors, and the shareholders will determine what appropriate 
salaries their management deserves, and that is all this does. Lender 
has a chance in this instance to put some restrictions on salaries, and 
if the borrower, being the financial institution, doesn't like those 
restrictions, feels it's in a solid position and can return the moneys, 
then so be it. That's the way it is.
  But the private sector, and particularly the financial system, was on 
shaky ground until this loan was made to them, and the purpose of this 
is to make sure that the institutions don't take advantage of the good 
graces of the American people.
  It brought kind of a chuckle when my friend Mr. Kingston talked about 
FEMA and the way the government ran FEMA. Well, FEMA under the Clinton 
administration, I would say, was run in a very good fashion. FEMA, on 
the other hand, under the Bush administration was at best a troubled 
organization.
  With that, I reserve the balance of my time.
  Ms. FOXX. Madam Speaker, I think that my colleagues who have spoken 
have been very eloquent in pointing out again what is wrong with this 
bill. I want to reiterate that this is simply to provide political 
cover for Democratic Members of the House and to change the subject 
away from the administration's failure to exercise adequate oversight 
of taxpayer dollars extended to prop up AIG and other organizations.
  Most Republicans voted against the bailout last fall. All Republicans 
and 11 Democrats voted against the stimulus bill. So, again, we can't 
be blamed for the things that the Democrats have carried out in this 
session of Congress.
  We are for accountability, and we want to see the administration and 
the Democratically controlled House get these things under control. But 
they keep doing things that make it worse and worse and worse.
  I believe, as do many of my colleagues, that we need to be focusing 
on holding all programs that get Federal dollars accountable. However, 
there is absolutely no effort going on in this Congress to scrutinize 
programs that are controlled by the Federal Government.

                              {time}  1200

  As my colleague from Georgia pointed out, we have such great examples 
of the wonderful way that the Federal Government spends money, such as 
FEMA and other areas where the public knows a big disaster has been 
made.
  But I want to point out again that this is the wrong way to go. We've 
said this from the beginning--again, with the bailouts last year. And 
we're asking now: What is the exit strategy from all of the sweeping 
government involvement in the private sector? What is the exit 
strategy?
  Is it going to be week after week after week that we're going to see 
another bill that tries to cover up the

[[Page 9525]]

mistakes that the Democrats have brought to us over and over again?
  This moves in the wrong direction from an exit strategy. It makes the 
Treasury Secretary, with approval of the members of the Federal 
Financial Institutions Examination Council, in consultation with the 
chairperson of the TARP Congressional Oversight Panel, the arbiters of 
what is reasonable or excessive compensation for covered institutions. 
They don't even define that in this bill. They leave it up to the 
Treasury regulators, the bank regulators, who created this problem to 
begin with. What kind of a system is that?
  It's a little crazy to say that we're going to give the people who 
created this problem more authority, more responsibility. They're going 
to define what is unreasonable or excessive.
  I asked yesterday, ``Can we define those things?'' No. We leave that 
up to the Treasury Department. But it was the Treasury Department who 
decided that the AIG bonuses were just fine. In fact, they promoted 
them. So are they going to say that they are going to give big bonuses 
under this? That doesn't make any sense.
  The best approach to protecting the taxpayers' investment in private 
businesses is through stronger oversight and accountability, not by 
further entrenching government in the operations and management of 
hundreds of businesses across America.
  I say again, Senator Levin says he wants to consider defense 
executive pay cuts. Are we going to go into every single business in 
this country and decide? Is the Congress going to do that, is the 
Treasury Department going to do that?
  We know that the bill a week ago to tax bonuses 90 percent--those at 
AIG--was clearly unconstitutional. My guess is that this bill is going 
to be decided that way also.
  We also know there was this big hue and cry and, again, outrage, 
outrage, outrage, expressed on the floor of this House about that bill, 
and the bill is going nowhere. After all the outrage, then the 
President says, Oh, maybe we went too far. The Senate buried the bill. 
Nobody's going to do anything about it. I'm wondering if that's going 
to happen to this too. And that's what should happen to this bill--the 
same thing that happened to the bill last week.
  But is it going to be a bill a week where we deal with this? Again, 
we try to make Republicans look bad because they are standing up for 
the Constitution, they're standing up for the people of this country. 
They are trying to rein in the government. Again, we don't say, We're 
here from Washington, and we're here to save you.
  The Congressional Oversight Panel that they want to put in charge of 
this, along with the Treasury Department, was never intended, nor is it 
authorized, to set policy.
  So here we have, again, a situation where we're going to mix the 
executive with the legislative. We know the Supreme Court has ruled in 
the past that that is unconstitutional. But this majority doesn't seem 
to care about the Constitution. They don't mind that they took an oath 
to uphold the Constitution. Day after day after day we see violations 
of the Constitution. This happens to be the latest one.
  I want to point out again what one of my colleagues said earlier. 
There's a rush to judgment here. This bill was introduced on March 23. 
So, here we are, continuing to rush in. Fools rush in where angels fear 
to tread is something my mother taught me a long time ago. I'm 
wondering if we need to think a little bit before we rush into areas 
where we might be treading on thin ice.
  I reserve the balance of my time.
  Mr. PERLMUTTER. Mr. Speaker, I would inquire of my friend from North 
Carolina whether she has any other speakers.
  Ms. FOXX. Mr. Speaker, I don't have any other speakers, but I do have 
a closing statement.
  Mr. PERLMUTTER. I would reserve the balance of my time.
  Ms. FOXX. The other side of the aisle, I think, is trying to demonize 
this issue. It's constantly trying to say that Republicans favor the 
rich and that they favor the poor and are looking after the taxpayers.
  Their vote later today on the budget is going to prove they're not 
looking after the taxpayers. They're not concerned about our children 
and grandchildren. They're simply concerned with politicizing every 
issue they can possibly politicize. And I think that I have a perfect 
example of that stated by one of their own.
  Yesterday, the D.C. Examiner published an article on the underlying 
measure that this rule deals with, and I will place it in the Record at 
this point.

             [From the Washington Examiner, Mar. 31, 2009]

        Beyond AIG: A Bill To Let Big Government Set Your Salary

                            (By Byron York)

       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

[[Page 9526]]

     with it, and now the House is preparing to do it all again.

  I will quote briefly from the article. This is a quote--and I 
probably will say that more than once because I think it's very 
important to continue to make sure this is a quote:
  ``Representative 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.'' That's the end of the quote from the D.C. Examiner.
  I certainly hope that the gentleman from Florida wasn't inferring 
that I, a Republican who opposes this bill, am a ``corrupt lawmaker.''
  None other than Thomas Jefferson in his manual, which is our guide 
here--Mr. Speaker, I know you are familiar with Mr. Jefferson's manual. 
It is what we use to guide us--not just day by day, but minute by 
minute on this floor.
  Mr. Jefferson said: ``The consequences of a measure may be condemned 
in the strongest terms; but to arraign the motives of those who propose 
to advocate it is not in order.'' Just because a Member chooses to 
oppose legislation, whether it be for reasons of policy or principle, 
they should not be disparaged by their colleagues, who wrestle with the 
very same voting decisions every day.
  We're seeing things which are unprecedented in our history. Just 
yesterday, the President of the United States fired the CEO of what was 
once the largest corporation in the world. Some of us are concerned 
about where this is going. Some of us think this is simply the wrong 
thing to do.
  It's easy to demonize the high-flying Wall Street fat cats who 
contributed mightily to our current situation. It's politically 
expedient to criticize corporate CEOs who seem tone deaf to the 
problems experienced daily by our constituents. But just because we're 
elected every 2 years doesn't mean that we leave our principles at the 
door when we enter this Chamber.
  Ambition is a good thing, but not when you impugn the motives of 
those who disagree. Those of us who have some experience understand 
that such words quoted from the D.C. Examiner, if they had been spoken 
on the floor, would have been considered inappropriate. They are just 
as inappropriate off the floor as they are on the floor.
  Mr. Speaker, this rule is wrong. The underlying bill is wrong. The 
efforts to continue to involve our government in places it has no 
business in is wrong.
  We need to do everything we can at this time--and we know we have 
people in this country hurting. Republicans are very, very sensitive to 
that. But the last thing in the world we need to do is to cut out the 
basis of this country--to weaken the very things that have made us the 
greatest country in the world. And involving ourselves more and more in 
controlling private enterprise will do nothing but to weaken this 
country more, to get our government involved.
  It's the wrong way to go. I urge my colleagues to vote against this 
rule and to vote against the underlying bill.
  With that, I yield back the balance of my time.
  Mr. PERLMUTTER. I yield myself such time as I may consume.
  I would urge an ``aye'' vote on this rule. So we will begin with 
that. The rule is designed and provides for seven amendments to a bill 
that limits executive compensation that is excessive, unreasonable, and 
not performance-based.
  If an executive of an institution that's been loaned money or in 
which it has had capital advanced by the United States of America, by 
the people of America, and pays $5 million, $10 million, $20 million 
for no reason, in an excessive manner, then that kind of bonus is 
restricted.
  The people's money as we've advanced it is to get the institutions 
back on track and not to pay executives exorbitant salaries. The people 
across the country expect that, number one. So I support the rule and I 
support the underlying bill.
  Now there are a lot of reasons we got into this position where the 
government and the people of this country have had to assist the 
financial system--not the least of which was something like the Gramm-
Leach-Bliley, which dropped regulations; or an inattention by the Bush 
administration to regulations within the financial system. But we are 
where we are.
  President Bush and Secretary Paulson asked for a huge advance to the 
financial system to keep it upright. We did that. As a Democrat and as 
a Democratic Congress, advancing $700 billion to a Republican President 
and his Treasury Secretary to put the financial system back on track 
was not the first thing I wanted to do. But they made a good case. 
Their pleas were heard. And we did that.
  Now we've got to make sure that people within that system don't take 
advantage of the good graces of the American people. And that's the 
purpose of this bill.
  It provides for guidelines and regulations. There will be amendments, 
Mr. Speaker, that will potentially limit this to bigger banks--not to 
smaller community banks.
  I would agree with my friend from North Carolina that whether it's on 
this floor or out in public, hyperbole and rhetoric can impugn 
somebody's character. She's concerned about Mr. Grayson. I would say 
there are others on her side who call people un-American because of the 
way they vote here.
  I would just say to you, Mr. Speaker, and to the Members of this 
Chamber, that our words do really matter, and we do need to keep an eye 
on what we say. We really do have to watch ourselves and not get caught 
up in the heat of debate.
  This bill is appropriate at this time to manage the lending that this 
country has done. As companies pay back their TARP advances, they're no 
longer subject to this. The management payments and salaries are 
subject to the board of directors and their shareholders.
  But at this point in time, with those particular institutions, we are 
both lenders and shareholders, and we certainly have a say over the 
compensation of the management.
  I urge an ``aye'' vote on the rule and on the underlying bill.
  I yield back the balance of my time, and I move the previous question 
on the resolution.
  The previous question was ordered.
  The SPEAKER pro tempore (Mr. Salazar). The question is on the 
resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. FOXX. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________