The House Financial Services Committee is debating a bill this morning that would suspend the pay packages of top executives at Fannie Mae and Freddie Mac. The government-backed mortgage finance giants have earned almost $13 million in bonuses.
Marketplace's Amy Scott reports.
Amy Scott In this morning's hearing on the bill, House Financial Services chairman Spencer Bachus said he's no fan of the government regulating private sector salaries. But Fannie and Freddie aren't in the private sector anymore. Taxpayers have spent about $170 billion bailing out the companies since they nearly collapsed during the financial crisis.
Spencer Bachus: These lavish compensation packages and bonuses are, in my mind, unreasonable and unjust to taxpayers, whose assistance is the only thing keeping Fannie and Freddie afloat.
In a building on the other side of the Capitol…Fannie and Freddie's chief regulator defended those lavish pay packages before the Senate Banking Committee.
Edward Demarco is acting director of the Federal Housing Finance Agency. He says the government-owned companies have had a hard time attracting and retaining executives.
Edward Demarco: Compensation and the uncertain future of the companies are both often cited as key reasons.
Back in the House, the bill under debate would limit those executives to the government pay scale -- like any other federal employee. Bachus pointed out that top cabinet officials -- like the Treasury Secretary who could earn millions on Wall Street -- make only around $200,000 a year.
I'm Amy Scott for Marketplace.