Pay for Performance Act of 2009: An Encroachment of a Free Society

Nearly two weeks ago the House of Representatives acted with great haste and without sound discussion and passed a bill that would impose a 90 percent retroactive tax on the bonuses paid to the executives of AIG.? The idea of government specifically targeting a small group of people who they disapprove of and then taking their money away from them which was guaranteed to them in their contracts is completely immoral.? Judd Gregg, senior Senator from New Hampshire declared; ?It is wrong?to propose to use the taxing authority of the government in a manner that is arbitrary, punitive, and targeted on a single group of people who they have deemed as having acted improperly.? When the populist cloud of anger began to settle, the Obama Administration backed away from the bill as did the Senate Democrats who were its most fervent advocates.

The House Financial Services Committee led by Massachusetts Democratic Congressman Barney Frank is championing an even more immoral and unethical bill targeting businessmen.? Mr. Frank who played an infamous role in the fiasco of Fannie Mae and Freddie Mac and who controversially stated, ?These two entities…are not facing any kind of financial crisis,? ?approved a measure that would impose government control 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.”

This sort of government control of the private sector is in direct violation of capitalism and our free market system.? Government should have no role in restricting pay and has no authority to determine what pay is ?excessive? and ?unreasonable.?? The bill is limitless and targets not just top executives but all employees, from the chairman to the janitor.? What is even more disheartening is that bill would void all current contracts and pay arrangements.? Employees will be subject to salary control even if their job within these companies had nothing to do with financial crisis, as we know was the case with the AIG contracts.? This is completely unethical, as former AIG executive Jake DeSantis said, ?None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.?

If salary control isn?t the road to serfdom then I don?t know what is.

-sam