This was a vote on final passage of H.R. 1664, the Pay for Performance Act. That legislation generally froze bonus payments for executives and employees of companies that accepted federal funds from the Troubled Asset Relief (“TARP”) Program until those funds were repaid. The Program extended funds to troubled banks. H.R. 1664 did allow for new compensation and bonus arrangements to be made, as long as they were based on performance standards to be crafted by the Treasury Secretary. The bill was one of several measures put forward in response to reports about multimillion dollar bonuses going to executives of AIG. The federal government was spending hundreds of billions of dollars to keep AIG and other banks solvent under the TARP and news of these bonuses created protests in Congress.
Rep. Grayson (D-FL), one of the co-authors of the Act, summarized its basis as seeing to it that “. . . no one has the right to get rich off taxpayer money, and . . . no one should get rich off abject failure.” He went on to say “a government that hands out money to such executives is a government that fails to protect its own taxpayers. Grayson added: “(I)f the banks want to avoid . . . these commonsense restrictions, there's a very simple way for them to do so. Just pay the bailout money back to the government . . . .”
Rep. Culberson (R-TX) expressed his opposition to the legislation by repeating an argument that the Republicans had been making in relation to a number of measures the Democrats had been supporting. He criticized “liberals who rushed their $800 billion stimulus bill through the House, ensuring these AIG bonuses would be paid” and claimed that “ if the Members had more than 12 hours to read (that) 1,100 page, $800 billion stimulus bill, we might have been able to spot problems like this before Members were forced to vote.” Culberson characterized the Pay for Performance Act as “political cover” for the Democrats.
Rep. Frank (D-MA), who was managing the Pay for Performance Act, responded to Rep. Culberson by arguing that the Republican position was not logical: Frank first noted that the Republicans were criticizing the fact that the stimulus package was rushed through without recognizing that it would permit the kinds of excessive executive bonuses that the pending legislation was trying to eliminate; he then claimed that, notwithstanding the Republican criticism of the Democrats for permitting those bonuses, they were now opposing a bill designed to eliminate them.
The bill passed by a vote of 247-163. Two hundred and thirty-seven Democrats and ten Republicans voted aye. One hundred and fifty-five Republicans and eight Democrats voted nay. As a result, the House approved and sent it on to the Senate legislation that limited the types of executive compensation that could be paid by companies receiving federal financial assistance,