During an impassioned debate on the House floor Wednesday, Democratic Rep. Barney Frank characterized Republican opposition to the Pay for Performance Act as a manifestation of “a psychological disorder” and compared GOP lawmakers to “kids who have had a toy bear or a security blanket” taken away.
The Pay for Performance bill, whose details were reported Tuesday in the Examiner, would impose government controls on the salaries and bonuses of all employees — not just top executives — of companies that have received capital investments through the Troubled Asset Relief Program and other federal measures. The bill would give Treasury Secretary Timothy Geithner the power to determine whether those salaries or bonuses are “unreasonable” or “excessive.” Geithner would also have the authority to draw up a set of “performance standards” that the covered companies would be required to use to calculate bonuses and retention payments.
The bill passed the full House Wednesday evening by a vote of 247 to 171. The vote marked a turnaround for many House Republicans, half of whom had voted in favor of a bill two weeks ago imposing a 90 percent tax on many AIG bonuses. This time, nearly all House Republicans voted against the Pay for Performance measure, while nearly all Democrats voted for it.
“The government can barely run the government,” Republican Rep. Roy Blunt, who voted in favor of the AIG tax, said during the floor debate. “To try to tell these companies how to pay the people who work for them is not the right thing to do.” Blunt voted against Pay for Performance.
During the debate, Democrats attempted to re-frame the bill as a measure to fix a defect in the $787 billion economic stimulus. In the rush to pass that bill in February, Democrats inserted a clause protecting bonuses for executives of AIG. A few weeks later, when the bonuses were paid and became the subject of enormous controversy, the House rushed to impose a 90 percent tax. On Wednesday, Democrats portrayed the Pay for Performance Act as an effort to fix the part of the stimulus that allowed those controversial bonuses. Frank attacked Republicans for criticizing the bonuses in the stimulus and then opposing the new bill that would outlaw them. “I have never seen people so attached to something they hate,” Frank said. “This is presumably a psychological disorder which I am not equipped to diagnose.”
“My colleagues on the other side,” Frank continued, “are kind of like kids who have had a toy bear, or a blanket, and this security blanket means a lot to them. Their security blanket is being able to complain about something [the stimulus bill] that happened before the break.”
The fight on the floor followed another contentious session Tuesday afternoon in the House Rules Committee. When that committee met to consider the Pay for Performance bill, some Republicans were irritated by a quote that had appeared in the Examiner from Democratic Rep. Alan Grayson, who wrote the original version of the bill.
“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 told the Examiner on Monday. “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.”
Grayson’s suggestion that any Republican who voted against the bill was “on the take” became the subject of testy exchanges in the committee room when Republican Rep. Pete Sessions read the quote to Rep. Frank. “Do you agree with that statement?” Sessions asked.
“I will say this,” Frank answered. “It has been my experience that there are Republican members of Congress who are able to be completely mistaken for free.”
Some in the room chuckled, but Sessions pressed on. “You would not say that a vote on either side of this would be an indication of showing whether you are corrupt or bought off?”
“I would say I would not generalize,” Frank answered. “I would make individual judgments about that.”
Later, Rep. David Dreier, the ranking Republican on the committee, took up the subject with Grayson himself. Dreier asked Grayson whether he, Grayson, had been misquoted in the Examiner. Grayson did not directly address Dreier’s question, instead saying he agreed with the way Frank had answered the question earlier.
“So am I correct in inferring…that you are not saying anyone who votes against this is corrupt?” Dreier said. “Do you believe that any member who votes against this measure is, in fact, corrupt?”
“Not necessarily,” Grayson said.
The debate significantly raised the profile of Grayson, a freshman from the Orlando, Florida area who has so far attracted little national attention. On Wednesday, Grayson published a statement in the Huffington Post, arguing that the government should have the power to set the salaries of all employees of companies that have received a capital infusion. A day earlier, Grayson appeared on the Fox Business Network, where he was grilled by anchor Neil Cavuto for refusing to define what would be “unreasonable” or “excessive” compensation.
“That’s for the Secretary of the Treasury to do,” Grayson said.
Prospects for the Pay for Performance Act in the Senate are unclear. Its predecessor, the AIG tax measure, disappeared within days after passage in the House when the Obama White House and then Senate Democratic leaders distanced themselves from it.
Byron York, The Examiner’s chief political correspondent, can be contacted at [email protected]. His column appears Tuesday and Friday, and his stories and blog posts can be read daily at ExaminerPolitics.com.
