The Obama administration made like Santa Claus just before the Christmas holiday, enlarging the potential bailout of mortgage giants Fannie Mae and Freddie Mac—and approving Wall Street-like compensation packages for their leaders. On Thursday, President Barack Obama unilaterally raised the $400 billion cap on emergency aid to the companies, which were heavily criticized for helping bring about the housing crisis.
Prior to the announcement by the White House, the
Federal Housing Finance Agency approved $42 million in salaries and bonuses to the top 12 executives at Fannie Mae and Freddie Mac. Fannie Mae chief executive Michael J. Williams and Freddie Mac chief executive Charles Haldeman each will receive a base salary of $900,000 and bonuses and incentive payments of up to $5 million for running companies that might have collapsed had it not been for the federal government’s rescue in 2008.
“The Obama administration’s decision to write a blank check with taxpayer dollars for the continued bailout of Fannie Mae and Freddie Mac is appalling,” said Representative Scott Garrett (R-NJ), a member of the House Subcommittee on Financial Institutions and Consumer Credit that oversees the two companies. “Not only is this a continued bailout of failed entities that need to be privatized to protect the taxpayer, the timing of the announcement is clearly designed to try and sneak the bailout by the taxpayers.”
-Noel Brinkerhoff