The Federal Housing Finance Agency (FHFA), a bureaucratic agency charged with the oversight of Fanny Mae and Freddie Mac, has recently proposed a sly and dangerous salary increase for the CEOs of the two companies. The proposal epitomizes the short-term memory of government regulatory boards, and the inevitable push by unelected bureaucrats to increase government spending as soon as the eye of public scrutiny has waned.
In 2012 the FHFA reluctantly heeded the nation’s call for a different approach to the salary of the CEOs for Fannie and Freddie, and instituted a salary cap at $600,000, a far cry from the multi-million dollar salary previously enjoyed under the government conservatorship. On behalf of the American people Congress strong-armed the FHFA to impose the cap, much to the bureaucratic agency’s chagrin. Then and now, the bureaucrats argue the higher salary is necessary to attract qualified candidates for this position. The stench of irony in this argument is overwhelming.
Donald Layton, current CEO of Freddie Mac, is an outspoken opponent of the FHFA’s proposal. He considers it an honor and duty to serve his country in its time of need and believes the $600,000 salary is more than fair compensation.
It is no surprise that the unelected leaders of the FHFA are puzzled by Mr. Layton’s contentment with his current salary, as they are bureaucrats whose nature it is to leach off government spending for personal gain. Their role as public servants is subsumed beneath their drive for personal profit, even when those profits are won at the expense of the American taxpayer. The FHFA belief that qualified candidates will only elect to serve if given higher pay, betrays their own disposition to viewing government service as a medium for personal profit.
Disconcertingly, the FHFA has complete authority to determine the CEOs salary. Even though the White House and Treasury Department have condemned the FHFA proposal, without public intervention, it will surely be instituted, and the leadership of Fannie and Freddie will return to bureaucratic minded individuals who wish only to suckle at the teat of unabashed government spending. This insidious new proposal is a backhanded and egregious attempt to undo the progress Americans have made and ignore the lessons we have learned while clawing our way out of the Great Recession.
Congress must strongly advocate against the new proposal, to ensure that the bureaucrats at the FHFA do not take advantage of the public’s inattention to this issue. As long as Fannie and Freddie remain under government conservatorship, the CEOs salary cap is integral in ensuring that those who take the position are aware they do so in service to the American public, a reality the FHFA seems all too willing to dismiss.