Spencer Bachus

Mr. BACHUS

Mr. BACHUS. I yield myself 1 minute. We don't know how long all this is going to last. But what I will say is you are giving--for every employee of these companies, you're giving the Secretary of the Treasury the right to control their pension benefits, their retirement benefits, their health benefits, whether intended or not. I don't think that you can assure me that the power will not be abused in the future because, as the gentlelady said, her amendment includes any compensation for the rest of their life. It also includes any compensation before they arrived at the company. That, to me, is a very broad brush. I would definitely oppose this amendment.

Mr. BACHUS. Extend the time by 1 minute on each side.

Mr. BACHUS. Yes.

Mr. BACHUS. I ask unanimous consent that each side be given an additional 1 minute.

Mr. BACHUS. I understand what the chairman is saying. But this bill applies to all these financial institutions. I believe this is a sweeping definition of compensation.

Mr. BACHUS. The gentlelady understands that you're giving sole discretion to a few people to determine whether someone--in other words, all employees' pension, health, or retirement benefits are excessive. Is that what the gentlelady intended to do? That's what her amendment does.

Mr. BACHUS. I yield.

Mr. BACHUS. Will the gentlewoman yield?

Mr. BACHUS. Mr. Chairman, every day brings news of a new government program, a new government intervention, a new government mandate, or a new government tax. Most of them share the same thing: they are large. This bill claims to be about executive compensation. But what it really is is just another step expanding the size, the involvement--and more importantly--the control of the Federal Government into not only the private sector but into all aspects of our lives. That's our concern. Yes, it's about this bill. But, yes, Mr. Chairman, it is about much more than this bill. You're right about that. Sometimes the expansion is subtle, as in the case of this bill. Sometimes it's more direct, more obvious, like the budget that we will vote on as soon as tomorrow. We are witnessing in light speed in just the past few months--and then the budget will pass in the next few years as it goes into effect--a relentless and massive expansion of the Federal Government. And I, for one, Mr. Chairman, am concerned. Outraged? I would say ``fear'' and ``concern'' are better. But I do believe that as the years go by and we look back on what we've done and what we will do in this next year, I believe the American people will be outraged. As a Member, I took an oath to uphold the principles of the Constitution which intentionally and specifically limited the power of the central government. Would our forefathers have ever considered giving the government a say on how much a private citizen earned, the so-called say-on-pay? In reading both the Constitution and the Federalist Papers, it clearly appears they would not. I think most Americans believe our Founding Fathers had it right. I applaud the chairman's honesty. For years, he has advocated a government role in limiting the amount of salaries. Later tonight, we will consider a budget. As we have said repeatedly--and we are going to say again today--it spends too much, it taxes too much, and it borrows too much. It expands the government control on a scale that we've not seen before, not even in the New Deal. It spends more money in this administration than was spent from the time of George Washington to George Bush. The majority criticized Bush for the deficits, and now they will double and triple them in the next 10 years under their proposal. The scope and reach of this legislation is breathtaking. If you had told me a month ago--and I will recognize the chairman. I will yield to him in a minute when I get to the particulars on this bill. If you had told me a month ago that Congress wanted to increase the tax burden on charitable contributions, I would have said it's an April Fool's joke. But the fact is that if donations to charities go down, the government will say it has to step in. But there will be a big difference. The government will be choosing what it wants to support and how. It can support groups like ACORN instead of my local church or local charity. Instead of allowing people to support their own causes and make their own choices about their charitable contributions, the government will expand into what will obviously and clearly be a restriction on private charities as their funds are restricted. Unfortunately, it wasn't an April Fool's Day joke, and that's what is being proposed this very week, restricting private contribution, and there's a pattern developing here. Just this week, we saw a government mandate to change the management of General Motors. Regardless of what you think about the performance of the CEO--and I don't think it was good. I, for one, do not defend his stewardship. But do we want the Federal Government making such far- ranging decisions on hiring and firing and setting salaries and job descriptions for everyone from the manager to the receptionist? This is all about government control, government command and control, running an economy, not according to free enterprise principles, which many of my Democratic colleagues admittedly and honestly don't agree with. It is about making business decisions based not on competitiveness but based on social goals. Does anyone really believe that a government that is about to add $10 trillion to our debt, to our children and our grandchildren, has any expertise at all in telling the private sector how to turn a profit? During the campaign, President Obama said, ``So if somebody wants to build a coal-powered plant, they can. It's just that it will bankrupt them because they're going to be charged such a huge sum for all the greenhouse gas that's being emitted.'' Later today, we will take a step down that road with cap-and-trade. We're going to raise every American's utility bill if that utility is fired by coal. We hear the government will require the automobile makers to produce green cars. No one argues with the idea of cleaner-burning cars, but maybe someone should ask consumers whether they can afford to spend several thousand dollars more to buy them or whether such a policy will end the need for taxpayer support. I think not. I think it will make General Motors less profitable, and the taxpayer investment will certainly be at risk. This is the problem with government getting involved in the management of business. Decisions will be based on the government's political agenda and not sound economics. There will be no limits to how far this can go and will go. Will the government start telling companies we'd like to review your advertising to see if you're sending the right message or spending too much? Will the government tell drug companies, who market similar products, we think there's too much competition, maybe you should combine products or merge to make prices cheaper? Now, you don't have to do that, but if you do business with the government, you do. Some believe less competition leads to lower prices. I don't think this is the case at all. Now, the legislation before us today, it gives the Treasury Secretary and a board, all unelected, headed by a Harvard professor, wide discretion to formulate performance-based compensation standards for hundreds of banks across America. Who does the legislation apply to? Let me read the legislation: Compensation payment to any executive or employee under any existing compensation arrangement. Any executive or employee? Line 23 on page 2, Mr. Chairman. Every employee. There is nothing in this legislation to prevent the Secretary from deciding that one measure of performance is where the loan officers are approving loans to favored constituencies that the administration may believe are entitled to a loan or to credit. That was precisely the type of government allocation of capital and decisions that helped lead us into the housing bubble and the collapse of Freddie and Fannie, at a cost of hundreds of billions of taxpayer money. In 1999, I introduced into the Record on this House floor the article from the New York Times, not a friend of the minority, which said, first, the government directed that you would make home loans to people with poor credit, and then it went further and said not only with poor credit but without a down payment. Part of the reason we're here today is because the government did that. There's no question that we need more performance-based pay decisions, but the government deciding and judging the performance of employees and private companies? The Secretary of the Treasury deciding whether an employee is performing? I think not. The answer is not a dramatic expansion of government control. That hasn't worked in any country. It didn't work in Russia. It didn't work in China. It's not working in North Korea, and it's not working in Cuba. The American economy has always attracted entrepreneurs and business investment because it has been free of the political risk present in developing and socialist countries. We have attracted investment and have maintained a strong currency because of the belief in foreign investors, whom we depend on and must have to support not only this economy but the spending that is proposed. In fact, more than half the borrowing going forward for this new budget will have to be borrowed from citizens in just three foreign countries. Without those assumptions, the budget doesn't work. Without the assumptions, there's more deficits. Without those assumptions, without that foreign investment, we default on our obligation. As I say, we have attracted investment and a belief that we in America are productive, specifically because of the belief that our government does not take arbitrary and punitive actions to negatively affect business operations. It doesn't break contracts, it doesn't confiscate property, and it doesn't set salaries. Let me close by saying I honestly fear, Mr. Chairman, that this bill and the overall thrust of what we are hearing from this administration is tilting that delicate balance. The implications for our competitiveness as a country, our economy, and the prosperity of our citizens and their freedoms are disturbing. In the end, America has succeeded by putting its faith not in government but in the people. That's what the Constitution is all about, and I, for one, will always trust the people and always distrust the government. I make no apology for that. The solution is not this bill. What we need is a strategy to get the government out of the bailout business, out of the taxpayer bailout business, with no further intrusions into what should have been and needs to be and will need to be in the future, private decisions. Mr. Chairman, you and I can come to an agreement, and that agreement can be no further government bailout. That is the only way to avoid more government interference, more government control, and ultimately, the loss of not only our freedom but our prosperity. I appreciate the honest differences here, but I accept fully your statement that we on this side are outraged. We're fearful, we're concerned, and we become more so every day.

Mr. BACHUS. Yes.

Mr. BACHUS. Mr. Chairman, I rise to claim the time in opposition.

Mr. BACHUS. So it's all TARP.

Mr. BACHUS. But now do you realize, and I believe the chairman is sincere, do you realize that while you're urging them to return it, the President and the Secretary of the Treasury are saying, please don't return it because when you do, it will restrict or reduce lending?

Mr. BACHUS. But my question to you, Chairman Frank, is, this bill applies to all employees of all these institutions, does it not?

Mr. BACHUS. I would say, What if an employee upon his retirement is given stock in the company and 10 years after his retirement----

Mr. BACHUS. And I'm sincerely trying to--and I think amendment is an improvement. And I think the basis for it, as you both said, we don't want to limit the salaries of people who were not at fault. I think what this bill, Mr. Frank, what, Chairman Frank, you're attacking is what you've called a, and I know the sponsor of the bill said last night that the people who have been ripping off the American taxpayer by stealing money and sucking it into their own pockets.

Mr. BACHUS. This only involves capital infusions.

Mr. BACHUS. It does. In other words, the Secretary of the Treasury would have what I would consider sweeping rights to limit retirement benefits, medical benefits, and pension plans for any and all employees if he deemed that they were unreasonable or excessive or more than he deemed proper. Is that correct?

Mr. BACHUS. I yield myself 4 minutes and also ask the sponsor of the amendment if she would remain on the floor because I have a question for her, and also the gentleman from New Jersey has a question.

Mr. BACHUS. Mr. Chairman, would the gentleman who is controlling the time yield to the ranking member?

Mr. BACHUS. Mr. Chairman, the underlying bill applies to any executive or employee of these companies. The amendment by Mrs. Dahlkemper defines payment as payment before employment, during employment, or after termination of employment, which almost appears to be almost a cradle-to-grave period of time. Having said that, I have got specific concerns. I'd like to engage in a colloquy with the gentlelady from Pennsylvania about her amendment. Would your amendment enable the Treasury Secretary to establish compensation standards for employees after they retire?

Mr. BACHUS. What about AIG? Would they be included?

Mr. BACHUS. So he could determine that any payment after they retire was excessive or unreasonable?

Mr. BACHUS. Would those standards include retirement plans, pension plans, and retiree medical benefits provided by the company?

Mr. BACHUS. You mean the Treasury Secretary could limit retirement benefits, pension benefits, and their medical benefits?