Congress moves to prohibit "unreasonable and excessive compensation" as they keep theirs

Everybody's favorite boy, Barney Frank, wants to set your salary. Not just the salary that your boss gets, but also yours.

Beyond AIG: A Bill to let Big Government Set Your Salary
It was nearly two weeks ago that the House of Representatives, acting in a near-frenzy after the disclosure of bonuses paid to executives of AIG, passed a bill that would impose a 90 percent retroactive tax on those bonuses. Despite the overwhelming 328-93 vote, support for the measure began to collapse almost immediately. Within days, the Obama White House backed away from it, as did the Senate Democratic leadership. The bill stalled, and the populist storm that spawned it seemed to pass.

But now, in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill's language. That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

I wonder if Franklin Raines, Jamie Gorelick and the many others will have their huge bonuses from Fannie and Freddie affected. Maybe they're just like all the tax cheats in the administration and are more equal than the mere workers that pay their salaries. And bonuses.

There's a stench in DC and it isn't even August.

UPDATE: Tom Blumer of Bizzy Blog has some interesting insights on this absolutely ridiculous idea of Barney Frank.