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Fannie Mae and Freddie Mac, which so grossly mismanaged the nation's largest home-mortgage programs that they contributed to a collapsed housing market and nearly bankrupted the government, continue to report whopping losses despite a $170 billion federal bailout.
So why are taxpayers about to pay nearly $13 million in bonuses to 10 top Fannie and Freddie administrators, including the two CEOs?
That's a question lawmakers will consider today, when the House Financial Services Committee votes on a bill to suspend the proposed compensation packages.
The Senate is taking up similar legislation.
"It's outrageous that Fannie Mae and Freddie Mac executives would expect multimillion-dollar bonuses after $170 billion in taxpayer bailouts and one in every four homeowners' mortgage underwater," said Sen. John McCain, R-Ariz.
We agree, and urge the public to demand their representatives block these payments.
The Federal Housing Finance Agency (FHFA) approved the bonuses earlier this year that include $2 million each to Fannie Mae CEO Michael Williams and Freddie Mac CEO Ed Haldeman, on top of their $900,000 annual salaries. Mr. Williams has been with Fannie throughout the debacle; and while Mr. Haldeman arrived in 2009, he has hardly turned things around and plans to soon leave.
Eight other executives would share nearly $9 million in extra compensation.
The FHFA argues that it takes that kind of money to attract competent managers, yet competency has been in short supply throughout the industry, despite excessive compensation. Given the track records at Fannie Mae and Freddie Mac, we question whether paychecks are warranted, never mind bonuses.
The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.