I was elected last November because the people wanted change. And nowhere is change more desperately needed than on Wall Street, which is apparently the only place in the world where you can steal from the taxpayers and then bill them for services rendered. So far, taxpayers have spent over $500 billion in direct cash infusions into banks and financial institutions, with guarantees of trillions more. Yet, these companies are still paying their executives lavish sums for driving their companies (and the entire economy) into the ground.
I introduced a bill - the 'Pay for Performance Act' - to put an end to this theft. It's on the House floor today. It bans unreasonable and excessive pay to employees of financial institutions that are running on taxpayer money. The bill is based on two simple concepts. One, no one has the right to get rich off taxpayer money. And two, no one should get rich off abject failure. If the government owns a chunk of a bank, that bank must pay its employees reasonably, and all bonuses must be performance-based.
But first, let's be clear about what has happened. The government owns stakes in many companies through the TARP program, and Congress tried to put executive compensation restrictions on those companies. Big banks, though, were able to carve out an exception for any contract signed before February. AIG executives drove a truck through that exception and stuffed their pockets with our money. This bill closes that loophole.
The arguments against this bill are fairly predictable. The conservative Washington Examiner said that the bill grants the government 'extraordinary power' to set salaries. But the power it grants is pretty standard; the taxpayers are owners, and owners of companies set salaries for their employees.
Of course, there is a simple solution to this problem for any financial institution bent on paying its employees unreasonable and excessive compensation - just pay the taxpayer money bank to the taxpayer, and then you are free to act responsibly or irresponsibly. This bill grants the government the authority to act like any other owner of an institution, and when that ownership stake goes away, so do these restrictions.
Everyone agrees that Congress must act to reign in these excesses. These bad banks have come close to destroying our economy. They did so to enrich the small group of employees who made horrible, and in some cases, illegal bets. Calling these bad banks "casinos" is a disservice to casinos, who must actually by law hold money to back all the bets they've taken in. Calling these con artists "bank robbers" is a disservice to bank robbers, who can only steal as much money as the bank holds at the time, without tapping into taxpayer funds, too.
It's time for action, and Congress is acting.
Businesses have a duty to their stockholders to make money. The stock market speculation zeal of the American middle class has told corporate boards that owners want a fast buck. The lack of regulation tells them the public, through their government and congressmen, believes it's okay to press their luck and take high risks to get those fast bucks. If they make those fast bucks then they will be rewarded handsomely. Why do you think every other kid in college was looking to get into the financial services industry?
If the American people want to blame someone for greed, look in the mirror.
If Rep Grayson wants to protect us then make sure there are regulations in place to prevent financial institutions from growing so large or heavily leveraged that they become a threat to national economic stability and that there is sufficient funding for the regulatory agencies to monitor and enforce them.
What a funny thing for a congressman to say.....
To think that the money men once again convince Congress that protecting them was protecting us, just goes to show how out of the loop they are. Any time taxpayer money is used to bailout an institution ALL existing pay and other compesation contracts should be up for review and revision.
Next, I'd like to see a constitution amendment on Congressional term limits. The president is limited to two terms, so why can members of Congress serve indefinitely?
Change doesn't come easy. We have to first route out and understand a problem before we can fix it. We kow understand that the problem is Congress's unwillingness to take on people who reflect their own beliefs and interest when it comes to the entitlement of the rich and powerful.
OK, we got it. Now change it.
Oh, get real! The ONLY place in the WORLD??? What the hell do you call CONGRESS????? They steal from taxpayers daily for their own lifetimes, for their own personal wealth-building agendas and then just TAKE it from us, without BOTHERING to BILL us, giving themselves raises and perks and benes and retirements the REST of US can only DREAM of!!!!
It seems the height of hypocrisy to pretend any one in Congress is "outraged" by Wall Street. Who taught who to rape and pillage?
I don't agree with your statement that companies that pay back TARP funds should be free to act as irresponsibly as they want. Businesses need to be regulated or we will face many more catastrophes in the near future. The taxpayers may not be willing or able to bail them out.
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more in Politics »By BRODY MULLINS and LOUISE RADNOFSKY
WASHINGTON -- While Congress has been flaying companies for giving out bonuses while on the government dole, lawmakers have a longstanding tradition of rewarding their own employees with extra cash -- also courtesy of taxpayers.
Capitol Hill bonuses in 2008 were among the highest in years, according to LegiStorm, an organization that tracks payroll data. The average House aide earned 17% more in the fourth quarter of the year, when the bonuses were paid, than in previous quarters, according to the data. That was the highest jump in the eight years LegiStorm has compiled payroll information
Congressman, that statement fits you and your colleagues quite nicely.
The place to decide executive compensation is in the compensation committee, not in the legislature. You can change this outrageous behavior by forcing the compensation committee to be truly independent and contain at least one 'normal' small shareholder, a human being if you will, as well as forcing companies to provides shareholders with all upper management compensation information. Don't carry a big stick, shine a bright light.
Your solution is window dressing for continuing the status quo and letting these fiscal criminals pillage the taxpayers.
If a company is going to take taxpayer money from the government, the government has every right to limit excessive pay until they pay the taxpayer's back. That's hardly a big mean old 'stick'...that's just fair.
Florida seems to be a major hide-out for all manner of white-collar thieves and crooks, particularly in banking and finance. A regular Hole-in-the Wall of a state. At one point I even looked into ways to ban all incoming phone calls from the state of Florida.
Maybe start helping us citizens by cleaning up your own back yard?