This week: Housing regulator to defend Fannie, Freddie bonuses

By Peter Schroeder - 11/14/11 07:48 AM ET

The roughly $13 million in bonuses handed out to executives at Fannie Mae and Freddie Mac will be under the microscope this week when Edward DeMarco, the acting director of the Federal Housing Finance Agency (FHFA), testifies on Capitol Hill.

On Tuesday, the Senate Banking Committee will hear from DeMarco at a hearing devoted to oversight of the FHFA. The next day, he’ll venture to the House side of the Capitol, where he will defend the bonuses before skeptical members of the Oversight Committee. The chief executives from Fannie and Freddie will join him.

DeMarco admitted in a letter sent to lawmakers Thursday that executive pay at the troubled mortgage giants is a “vexing” issue but said he had to strike a balance between attracting and retaining quality talent and tightening the accounting books.

On Tuesday, the House Financial Services Committee will mark up legislation that would suspend pay packages for top executives at the mortgage giants and place their employees on the same pay scale as federal government employees.

Both chambers have to deal with spending measures this week as well. The first “minibus” spending package is due out of a conference committee on Monday, which will allow the House and Senate to vote on it by the end of the week.

That bill, which includes spending for agriculture, commerce, justice, transportation and housing, needs to be passed by Friday because it includes a continuing resolution that would keep the government operating through mid-December. Otherwise, a shutdown would begin after Nov. 18, when the current temporary spending bill runs out.

Meanwhile, the Senate will also start working on a second “minibus,” which contains funding for the State Department, financial regulators, the Department of Energy and for water projects. Senate leaders are hoping to clear the bill by Thanksgiving, but the White House has called for several changes to be made to the current package before passage, including more money for tax collectors.

On Tuesday, the Senate Budget Committee will discuss how changes to fiscal policy affect the economy. Congressional Budget Office Director Douglas Elmendorf is slated to testify. The panel will follow that up with a Wednesday hearing on how to improve regulatory performance.

The House Ways and Means Committee will continue debating what to do with corporate foreign income while a subcommittee holds a hearing on Chairman Dave Camp’s (R-Mich.) proposal to adopt a territorial system that would exempt 95 percent of a corporation’s offshore profits from U.S. taxation.

The House tax-writing committee on Tuesday will be discussing the efficacy of a health insurance tax credit that can be claimed by small businesses, thanks to the healthcare reform law. That subcommittee hearing comes after the Treasury Department’s inspector general for tax administration reported that fewer taxpayers than expected had claimed the credit. However, Treasury officials pushed back against the report, saying it relied on outdated figures.

The supercommittee has no public events scheduled for this week, as the dozen members will be huddling in private to continue the hunt for a broad agreement that cuts the deficit by at least $1.2 trillion. Next week marks the last full week the members have to work on an agreement before their Nov. 23 deadline.

On Thursday, the Senate Banking Committee will consider a handful of nominations, including the president’s pick of Thomas Hoenig to serve as vice chairman of the Federal Deposit Insurance Corporation. Hoenig served until recently as the president of the Federal Reserve Bank of Kansas City.