Dan Virkstis (Baucus), (202) 224-4515
Jill Gerber (Grassley), (202) 224-4515
Jennifer Hoelzer (Wyden), (202) 224-1063
John Gentzel (Snowe), (202) 224-8667
Baucus, Grassley, Wyden, Snowe Introduce the Compensation Fairness Act of 2009
Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.), Ranking Member Chuck Grassley (R-Iowa), Senator Ron Wyden (D-OR), and Senator Olympia Snowe (R- ME) today introduced the Compensation Fairness Act of 2009, legislation to discourage excessive compensation by companies that have taken taxpayer funds, and recoup payments made to executives at recipient institutions of funds from the Troubled Assets Relief program (TARP). For companies that received TARP funds, the legislation would impose a 35 percent excise tax on both employers and employees, on retention bonuses and other bonuses. The proposal would also put a cap on the amount of income employees of these companies are allowed to defer tax free. Small banks as defined by the tax code and entities that received less than $100 million in TARP funds would be exempt from the legislation.
“I’ve said before that paying excessive bonuses to the same group of folks that helped get us into this crisis is simply unacceptable. Millions of Americans continue to struggle to get by, counting their dollars, and Congress needs to do the same. We need to track Federal dollars now more than ever,” Baucus said. “We must act quickly on this proposal – for the sake of the American taxpayer, for the sake of what’s right to do. I will work with my colleagues in both the House and Senate to make sure that’s what happens.”
“I wish we didn’t have to do this, but the administration didn’t stop the bonuses this year, and the TARP legislation Congress passed last year didn’t include strong provisions to limit executive compensation at companies taking bailout money, and I said so at the time,” Grassley said. “Using bailout dollars for bonuses after companies have been run into the ground adds insult to injury against taxpayers. Without the massive infusion of public dollars through the bailout program, these companies wouldn’t even exist anymore, much less be handing out bonuses. Instead, the bonuses have done a lot of damage to public confidence in the financial sector, which was already very low. The outrage you see at the grass roots is justified.”
"Getting bailed out by the American taxpayer was more than enough of a bonus for these companies and individuals," Wyden said. "I'm hoping the second time is the charm for our bipartisan approach."
“If Washington is serious about ensuring that AIG’s gluttonous bonuses are the last corporate abuse of taxpayer rescue dollars, then we must act swiftly to enact meaningful and effective legislation that includes some real teeth,” Senator Snowe, a senior member of the Senate Finance Committee said. “This bipartisan compromise ensures that money paid out under the TARP program will not be funneled into obscene bonuses. In order to restore confidence in our financial institutions, we must end the arrogant culture that has ignored the hardship of Main Street and imposed further abuse on the American people.”
Additional original co-sponsors of the legislation include Senators Jeff Bingaman (N.M.), John Kerry (D-Mass.), Patty Murray (D-Wash.), Chuck Schumer (D-N.Y.), Blanche Lincoln (D-Ark.), Bill Nelson (Fla.), Debbie Stabenow (D-Mich.), Maria Cantwell (D-Wash.), Robert Menendez (D-N.J.).
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