White House Quietly Approves GSE Salary Caps

With no public ceremony and only the briefest of acknowledgments by his press secretary, President Obama signed into law a bill that puts a cap on the salaries of the CEOs of Fannie Mae and Freddie Mac.

The Equity in Government Compensation Act of 2015, S. 2036, which was introduced by Rep. Ed Royce (R-CA) and approved with a relatively rare display of bipartisan support on Capitol Hill, suspends the recently announced $4 million a year compensation packages for chief executives at the government-sponsored enterprises (GSEs) to $600,000 a year each.

“Reaching a similar bipartisan consensus on winding down Fannie and Freddie is critical, as the federal government's dominance of the housing market is unsustainable,” said Rep. Royce, noting that this was the first bill passed by Congress regarding Fannie Mae and Freddie Mac since they were put in federal conservatorship in September 2008. “We should encourage more private capital in the system to ease the way for future comprehensive housing finance reform.”

The White House, however, downplayed the President’s approval of this bill. A statement attributed to the presidential press secretary noted that the bill was one of five new pieces of legislation that was signed into law. The announcement was put online on the afternoon of Nov. 25, as Washington was shutting down for the Thanksgiving recess and media attention was focused elsewhere.