WASHINGTON — The House has
approved yet another bill to restrict bonuses and compensation at
financial firms that have received government bailout money, as Democrats
muscled the legislation past angry Republican opposition.
The vote on Wednesday was
247 to 171, with 237 Democrats and 10 Republicans in favor.
Congress has been
wrestling with the issue of limiting bonuses ever since a public outcry
last month over $165 million in payouts made by the
American International Group, the insurance firm, which has received
about $200 billion in bailout funds.
Amid the populist furor,
the House overwhelmingly approved a near total tax on any bonuses paid
since Jan. 1. But that legislation stalled after
President Obama expressed misgivings. Senate Republicans also voiced
opposition to it.
The bill adopted by the
House on Wednesday would bar companies that received a capital infusion
from the federal government from paying any bonus or other compensation
that is “unreasonable or excessive” as defined by the
Treasury, until they had repaid their bailout money to the government.
The companies would also
be barred from paying any bonus that was not “directly based on
A spokesman for the Senate
Harry Reid, Democrat of Nevada, said his party would study the House
legislation along with other proposals and would decide how to proceed
“over the next few weeks.”
Barney Frank of Massachusetts, the chairman of the Financial Services
Committee and main author of the bill, said the measure would address pay
limits adopted in the economic
criticized it, however, as blatant interference by government in the
The willingness of
Republicans to oppose the bonus restrictions seemed to reflect a
calculation that the public uproar had mostly subsided and that they would
be seen as defenders of the free markets and not as supporters of big Wall
A spokesman for the
Republican leader in the House, Representative
John A. Boehner of Ohio, said Democrats had pushed a bad bill to make
up for their failures to prevent the bonuses at A.I.G. He said the measure
would undermine efforts to stabilize the financial system by encouraging
companies to pay back their bailout money too quickly.
The debate on the House
floor was raucous and frequently acrimonious as lawmakers traded barbs.
“Would our forefathers
ever have considered giving the government a say on how much a private
citizen earns, a so-called say on pay?” asked Representative Spencer
Bachus of Alabama, the senior Republican on the Financial Services
The bill would require the
Timothy F. Geithner, to define what constitutes “unreasonable or
And Representative Tom
Price, Republican of Georgia, derisively recited Mr. Geithner’s résumé,
saying that nothing in his experience at the
Federal Reserve Bank of New York or the Treasury, nor in his
educational background as an Asian studies major at
Dartmouth College, qualified him to make such decisions.
“What experience does he
have in setting compensation?” Mr. Price asked.