Measure would ban any bailout bonuses

The House Financial Services Committee is set to
take up a sweeping prohibition on bonus payments at any firm receiving federal
bailout dollars.

The committee will debate legislation on Wednesday that would prohibit bonus
payments under the government’s $700 billion financial rescue program so long
as a firm is receiving government money. The prohibition would also apply to
Fannie Mae, Freddie Mac and the Federal Home Loan Banks, said Rep. Barney Frank
(D-Mass.), chairman of the House Financial Services Committee.

The prohibition would apply to existing contracts as well as future
contracts and would ban pay that is “unreasonable or excessive,” as
defined by the Treasury Department. The department would also be required to
define “performance-based measures” for awarding compensation.

The new effort comes after the House voted 328-93 to pass legislation that
would tax at 90 percent bonus payments for firms receiving at least $5 billion
in government aid. That tax would apply to individuals or families with annual
income of $250,000 or more.