The stunning silence from the White House on GSE bonuses

posted at 12:10 pm on November 16, 2011 by Ed Morrissey

Barack Obama has exhorted supporters to object to large bonus payouts at financial institutions that took TARP bailout money. The House Oversight Committee and its chair, Rep. Darrell Issa, want to know why Obama hasn’t objected to the ridiculous levels of compensation at the two largest bailout recipients — Fannie Mae and Freddie Mac. In a new report (embedded below) titled “Government-Sponsored Moguls: Executive Compensation at Fannie Mae and Freddie Mac,” Issa and the Oversight Committee detail executive compensation at the two GSEs, who — unlike their private-sector counterparts who have either fully repaid or are in the process of repaying their bailout funds — still demand more bailout money from Congress. They also have a new ad pointing out the hypocrisy of Obama’s class-warfare rhetoric:

Oversight’s executive summary makes the point quickly and substantively:

When the bubble burst in 2007, Fannie and Freddie began to lose billions of dollars of investments in mortgage-backed securities (MBS) guarantees. In September 2008, the Federal Housing Finance Agency (FHFA) took Fannie and Freddie into conservatorship as a result of mounting losses stemming from the financial crisis.The Enterprises became de facto government entities, funded by preferred stock purchase agreements from the Department of the Treasury (Treasury). Today, the Enterprises remain a multi-billion-dollar drag on the federal government’s finances. Since they entered conservatorship, Treasury has provided $169 billion to Fannie and Freddie – and the payouts are scheduled to continue with no end in sight. According to recent FHFA projections, by the end of 2014, Treasury assistance to the Enterprises will total $220 billion to $311 billion.

Since the Enterprises have become government-funded entities, lavish payment packages have been doled out to their senior executives, and taxpayers have been footing the bill. In 2009and 2010, the Enterprises’ top six officers were given a total of more than $35 million in compensation. Of that amount, a total of $17 million in compensation was given to the CEOs of the Enterprises. Additional bonus installments for 2010 may still be forthcoming, and the two CEOs stand to make a total of $12 million in 2011. In addition, an executive has been awarded a substantial signing bonus – $1.7 million – upon joining the Fannie Mae. As these figures indicate, senior executives at Fannie Mae and Freddie Mac have become the highest compensated workers on the federal payroll – making as much as eight times more than the President of the United States. The executives even make more than their conservator, FHFA Acting Director Edward J. DeMarco.

Such lucrative compensation packages may be appropriate for profitable companies in the private sector, but substantial questions exist whether they are appropriate for entities in taxpayer-funded conservatorship, especially those that are bleeding billions of dollars each quarter. In this context, it is important to remember that taxpayers – not corporate shareholders – are footing the bill for these lavish bonuses.

Exactly. Shareholders can vote with their feet and their wallets in support or opposition of private-sector executive compensation packages. Taxpayers are given no choice with Fannie and Freddie. Now, which of the two should government officials be discussing — private-sector compensation, or GSE compensation funded by American taxpayers? And why does Obama rail about the former while completely ignoring the latter? It’s because he wants to keep Fannie and Freddie in place so that activist government officials can exploit both once again for their social-engineering purposes.

Oversight is holding hearings on these issues as this post goes live. We’ll keep an eye on the proceedings, and see whether Democrats outraged over bonuses in banks have any concern about taxpayer dollars going to Fannie and Freddie bonuses.

Fannie and Freddie Executive Compensation Staff Report from the House Oversight Committee

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where are our Replican Candidates? Everyone one of them should start every interview or Debate question with “Why has Barry not renounced Freddie and Fannie bonuses?”

SDarchitect on November 16, 2011 at 12:13 PM

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html

Update: Fannie Mae and Freddie Mac Invest in Lawmakers

Dodd, Christopher J S CT D $165,400

Obama, Barack S IL D $126,349

Kerry, John S MA D $111,000

Bennett, Robert F S UT R $107,999

Bachus, Spencer H AL R $103,300

William Amos on November 16, 2011 at 12:15 PM

Obama doesn’t object because this kind of taxpayer funded payoff is what Obamanomics is. It’s crony-socialism.

forest on November 16, 2011 at 12:16 PM

“why Obama hasn’t objected to the ridiculous levels of compensation at the two largest bailout recipients — Fannie Mae and Freddie Mac.”

World-class screw-up don’t come cheap. Any of us at HA could run those agencies and possibly drop a few million. But, losing tens of billione requires a specila skill set that requires top salaries and bonuses.

bw222 on November 16, 2011 at 12:18 PM

Great book about the rise of the FM’s, and the resulting burst of the housing bubble: Reckless Endangerment, by Gretchen Morgenson

iurockhead on November 16, 2011 at 12:19 PM

William Amos on November 16, 2011 at 12:15 PM

And 0′s total was over a very short time period as compared to the others.

iurockhead on November 16, 2011 at 12:20 PM

TARB?

This was produced by the House Oversight Committee? I like the ad….but where does the money come from? RNC?

Tim_CA on November 16, 2011 at 12:20 PM

William Amos on November 16, 2011 at 12:15 PM

Well, well, well! Hellooooo there.

a capella on November 16, 2011 at 12:22 PM

where are our Replican Candidates? Everyone one of them should start every interview or Debate question with “Why has Barry not renounced Freddie and Fannie bonuses?” SDarchitect on November 16, 2011 at 12:13 PM

I would hope they never refer to him as Barry. Not only is it disrespectful, it makes him sound more American than he is.

The better question is “Why has President Obama not denounced the Freddie and Fannie bonuses and what did Newt do for $1.6 million?”

Basilsbest on November 16, 2011 at 12:22 PM

This kind of stuff may be the best indicator of the Obama mindset about re-election.

Get it while they can and get out, it seems to me.

They should be in jail, but it won’t ever get the money back.

golfmann on November 16, 2011 at 12:24 PM

where are our Replican Candidates? Everyone one of them should start every interview or Debate question with “Why has Barry not renounced Freddie and Fannie bonuses?”

SDarchitect on November 16, 2011 at 12:13 PM

Why?…because the Repubs. use Fannie and Freddie and Sallie the same way the Dems use them…to enhance their “friends” when they are in power…

The system is corrupt from top to bottom and from left to right…

PatriotRider on November 16, 2011 at 12:32 PM

Just Barry being his normal hypocritical self. I’d still like him to explain his wife’s compensation jumping from $100K a year to $300k a year after SENATOR OBAMA got her employer a $1 million grant.

GarandFan on November 16, 2011 at 12:32 PM

This is such an incomprehensible outrage, it defies words.

rjoco1 on November 16, 2011 at 12:33 PM

This won’t be a problem if they were privite companies not back by the US taxpayers.

Oil Can on November 16, 2011 at 12:43 PM

This won’t be a problem if they were private companies not back by the US taxpayers.

Oil Can on November 16, 2011 at 12:43 PM

What private company in their right mind would buy trillions of mortgages at 5% over 30 years considering how much we need to inflate our currency to even have a prayer of servicing our national debt.

elfman on November 16, 2011 at 12:51 PM

Leftist hypocrisy, a dog bites man story.

Seriously, has there ever been an issue where left wing hypocrisy ever hurt them in any important way? I’ve been following politics for 30 odd years, and I cannot think of a single case.

Rebar on November 16, 2011 at 12:56 PM

elfman on November 16, 2011 at 12:51 PM

Exactly, we have created an artificial model. If the GSE where private, you see more affordible housing and you’ll see private investment. You won’t have the “banking crisis” because they would be very careful who they would lend to.

In 1996(?) Bill Clinton found away to use the GSE as political tools. Bascially, now the model is broken and the only way is to get the government out and go completely private. Or you’ll see it again in the future. We can never have GSE again, and we probably shouldn’t.

Oil Can on November 16, 2011 at 1:00 PM

William Amos on November 16, 2011 at 12:15 PM

Proud to say you can take “Bailout Bob Bennett” off that list. He was taken out in convention here in Utah. Mike Lee took his seat.

batter on November 16, 2011 at 1:12 PM

I don’t know…just a second and I’ll ask my VP selection guy, Angelo Mozilo’s little b*tch, earnings manipulator, and $200 million dollar man, James Johnson.

MNHawk on November 16, 2011 at 1:37 PM

and see whether Democrats outraged over bonuses in banks have any concern about taxpayer dollars going to Fannie and Freddie bonuses.

surely you jest…

crickets will be chirping…

cmsinaz on November 16, 2011 at 1:54 PM

let’s focus on newts monies instead
-lsm

cmsinaz on November 16, 2011 at 1:55 PM