Turns out if you work at a company that's taken federal money, the government's going to save you having to wait until your company derives your new pay scale from what they can pay the CIO this month.
On Backbone Radio a couple of weeks ago, my colleague Matt Dunn and I disagreed on whether or not the government should try to claw back the AIG bonuses. I didn't think so, but could see there was an argument in using AIG as a cautionary tale to keep others from taking the bait in the first place. Matt was wondering why the Republicans weren't making a bigger issue of this.But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.
...That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.
The measure is not limited just to those firms that received the largest sums of money, or just to the top 25 or 50 executives of those companies. It applies to all employees of all companies involved, for as long as the government is invested. And it would not only apply going forward, but also retroactively to existing contracts and pay arrangements of institutions that have already received funds. (emphasis added -ed.)
Turns out we were both operating under the delusion that there were still rules.
Readings of the Commerce Clause have been increasingly detached from reality for the last 70 years, beginning with a decision that selling corn within the borders of Indiana somehow constituted interstate commerce, because corn is fungible. This was followed by a decision that a company was engaged in interstate commerce because its suppliers' suppliers moved products across state lines.
Since the government hasn't provided any exit strategies for these, ah, "investments," this amounts to a perpetual pay schedule. And you thought that post-graduate degree was going to open the door to someone more than a GS-8.
In fact, Treasury is considering dispensing with the requirement that you have received Federal money, requiring only that you be publicly traded. Given the open-ended nature of this commitment, it's only a matter of time before the employees of these companies demand that their competitors be held to the same standard.
After all, it's only fair.