The quest to stop Fannie-Freddie fat cat bonuses
Senators John Thune and Mark Begich introduce bill to make sure huge Fannie Mae and Freddie Mac-style bonuses never happen again
This is a rush transcript from "On the Record," February 1, 2012. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: You know, it just doesn't seem to stop. Will the Fannie Mae and Freddie Mac nightmare for the American taxpayers ever end? First taxpayers bail out the mortgage giants to the tune of over $150 billion -- yes, billion! You would think that would be the end of the asking, but not so fast. In November, Fannie and Freddie had the nerve to ask for almost $13 million in bonus pay for their executives. So will this ever stop?
Senator John Thune joins us. I guess you think it might perhaps? Are you trying to make it stop?
SEN. JOHN THUNE, R-S.D.: We are. We have a bill, Greta, that basically would change the pay structure, the compensation structure for the executives at Freddie Mac and Fannie Mae and make it more consistent with other financial regulators, like the FDIC and the OCC and take any undispersed bonuses, those that haven't even been paid yet, prevent those from being awarded and use that to pay down the national debt.
VAN SUSTEREN: Wouldn't it be nice if you could legislate good judgment instead? The man who authorized -- the acting director who authorized these payments -- it would be so much easier if he would just use good judgment and take the pulse of the American people.
THUNE: It would. And that's why people were so outraged. They saw at a time when Freddie and Fannie were losing, they posted losses in 16 of the last 17 quarters. They had just come to the Congress, both of them, for federal infusions in the multis of -- multiple billion dollar requests. And you know, the base compensation for the CEO of Fannie Mae last year was $5.6 million, which is 14 times what the president of the United States makes. And that's what I think people are outraged about.
So we're trying to respond to it. I hope we can get a vote. I think it's...
VAN SUSTEREN: Hope?
THUNE: ... important that...
VAN SUSTEREN: I mean, (INAUDIBLE) bipartisan. You've got -- you've got...
(CROSSTALK)
THUNE: ... so far co-sponsors...
VAN SUSTEREN: You've got...
THUNE: ... right.
VAN SUSTEREN: Both -- the both -- both sides of the aisle are doing this.
THUNE: That's correct. And there's an amendment actually on the floor fight now that Senator McCain offered to the bill that we're voting on this week that would ban bonuses into the future.
But this legislation, this bill, I hope, is something that we can get voted on in the near future. And we'll look for an opportunity to -- if we can't get a straight up and down vote, to attach it as an amendment to another bill.
VAN SUSTEREN: All right, the FHFA acting director is the one who authorized the bonuses, or wants the bonuses, saying that it attracts good talent. He's still in that position to make other decisions. This one is -- seems pretty much -- you know, I know he -- he -- he tried to justify it, saying he was trying to attract good talent.
THUNE: Right.
VAN SUSTEREN: I don't consider it good talent if -- if you have -- if you're -- if you're failing. They had asked for more money. What about him? Does he stay?
THUNE: I think that's probably -- he probably -- he serves at the pleasure of the president. It's up to the president. I think the president's been really silent in this. And it's his Treasury secretary, and as you mentioned, this appoint -- appointment of his that make these decisions on executive pay. And the president hasn't spoken up at all on this, so...
VAN SUSTEREN: But why not? I mean, that's what I don't get! I mean, and I don't mean to go into other things, but even, like -- I mean, the people who made the decision at Solyndra. We never find out who they are. We know who the acting director is here -- never find out who these people are or someone who authorizes "Fast and Furious." They remain someplace stuck in the government while you try to sort of clean up the problem on Capitol Hill and try to stop them from having the authority to issue these bonuses, or whatever. But the actual culprits in the federal government who have an inability to have good judgment, they're still there for the next bad judgment!
THUNE: Well, they are, and it's -- there's been a lot of unbridled power in the executive branch in this administration, all the czars that were created and all the ways in which they've tried to accomplish their agenda through agency regulations, things that they can't get through the political process in Congress. It's really unprecedented. And these recess appointments are another example of that, where he put people into positions, you know, went around Congress...
VAN SUSTEREN: But you guys did that. I mean, but the Republicans...
THUNE: Well, not this way.
VAN SUSTEREN: ... do that, too. I mean...
THUNE: Not while we were -- this was -- this was an unconstitutional power grab. And it's going to be litigated. There's going to be a lot of lawsuits and challenges that are filed, and many of us, as members of Congress, will join in those -- in amicus briefs in support of those lawsuits.
VAN SUSTEREN: Why doesn't Senator Harry Reid just say, Let's go vote on this right now?
THUNE: Well, maybe he will. I'm not holding my breath...
VAN SUSTEREN: I mean, what's -- why wouldn't he?
THUNE: ... on that...
VAN SUSTEREN: Why wouldn't he? I mean, what -- I mean, he's got Democrats that want to do this bill.
THUNE: I would think he would. My guess is that there's probably some resistance to it because the administration, I'm guessing, is opposed to this. Obviously, they...
VAN SUSTEREN: Is there any chance the money...
THUNE: ... haven't spoken out on it...
VAN SUSTEREN: ... could go out in payment? Is there any -- I mean, have you stopped the actual payment?
THUNE: Well, there's still undispersed bonuses, and that's what we're trying to get at. We're trying to prevent the awarding of those undispersed bonuses, and the -- and prevent that in the future, and then bring the entire executive compensation structure at Freddie and Fannie back to what's in a line with the OCC...
VAN SUSTEREN: But the ones...
THUNE: ... the FDIC and other financial regulators.
VAN SUSTEREN: But the ones that are in line to be dispersed that are sitting there, could he -- could the -- could someone run out the clock so that those do get dispersed, or does your bill stop that?
THUNE: Sure. Absolutely. Well, I mean, I think they could run out the clock if we don't get action on our bill, which is why we've got to try and push this along. And I think that, you know, the American people deserve an answer on this. And I think members of Congress should go on the record. We ought to have a vote.
VAN SUSTEREN: Indeed. Senator, thank you, sir.
THUNE: Thanks, Greta.
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