To suspend the current compensation packages for the senior executives of Fannie Mae and Freddie Mac and establish compensation for such positions in accordance with rates of pay for senior employees in the Executive Branch of the Federal Government, and for other purposes.

Summary: Equity in Government Compensation Act of 2010 - Requires the Director of the Federal Housing Finance Agency to: (1) suspend immediately the compensation packages approved for 2010 for the executive officers of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac); and (2) establish, in lieu of such packages, a compensation system for such officers in accordance with the rates of pay for positions in the Executive Schedule and the Senior Executive Service of the federal government.

Expresses the sense of Congress that each executive officer of Fannie Mae and Freddie Mac should return to the Secretary of the Treasury (clawback) any compensation earned in 2009 that was in excess of the maximum annual rate of basic pay authorized for a position in level I of the Executive Schedule.

Instructs the Secretary of the Treasury to transfer any such amounts returned to the Secretary to a specified account in the Treasury for receiving gifts and proceeds from their sale or redemption, and dedicated to reducing the public debt.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Equity in Government Compensation 
Act of 2010''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) the Federal National Mortgage Association (known as 
        Fannie Mae) and the Federal Home Loan Mortgage Corporation 
        (known as Freddie Mac), which are both privately owned but 
        publicly chartered government-sponsored enterprises (GSEs), 
        were at the center of the mortgage market meltdown that caused 
        the financial crisis that commenced in 2008;
            (2) the failures of Fannie Mae and Freddie Mac helped 
        precipitate the deepest economic decline since World War II and 
        the loss of 7,500,000 jobs;
            (3) in September 2008, the Treasury Department, Federal 
        Reserve Board, and Federal Housing Finance Agency (FHFA) 
        exercised authority granted by the Congress to place the two 
        GSEs in conservatorship, a form of nationalization that puts 
        the regulators firmly in control of the GSEs' daily operations;
            (4) in September 2008, the Administration established a 
        $200 billion facility to purchase senior preferred stock in the 
        enterprises to backstop their losses;
            (5) in February 2009, the Obama Administration raised the 
        senior preferred stock purchase commitment to $400 billion;
            (6) on Christmas Eve 2009, the Obama Administration removed 
        any limits on the use of Federal funds to cover losses at the 
        enterprises, significantly expanding a commitment that has 
        already resulted in the expenditure of more than $110 billion 
        in taxpayer funds to purchase senior preferred stock in the two 
        enterprises;
            (7) as a result of the Government's actions, the taxpayers 
        of the United States now own at least 80 percent of the two 
        GSEs;
            (8) the Administration is using Fannie Mae and Freddie Mac 
        as instruments of Federal housing policy, making it less likely 
        that they will ever be returned to private ownership;
            (9) the Congressional Budget Office has concluded that 
        Fannie Mae and Freddie Mac have effectively become government 
        entities whose operations should be included in the Federal 
        budget;
            (10) the GSEs are expected to be a long-term drain on the 
        taxpayers as a result of market conditions and the political 
        and public policy mandates imposed on them by the 
        Administration and the Congress;
            (11) in spite of these liabilities, at the end of 2009, the 
        Treasury Department and the FHFA approved compensation packages 
        for 2010 for the chief executive officers of Fannie Mae and 
        Freddie Mac of $6,000,000 each, including incentive pay of 
        $2,000,000 each, which is 15 times more than the annual 
        compensation of the President and 30 times more than the annual 
        compensation of a Cabinet Secretary;
            (12) the Treasury Department and the FHFA also approved 
        multi-million dollar compensation packages for a number of the 
        GSEs' top executives, payable in cash rather than in the type 
        of stock options that have characterized compensation 
        arrangements at other large financial institutions that have 
        received extraordinary government assistance;
            (13) on September 17, 2008, FHFA determined that no 
        executive officer of Fannie Mae or Freddie Mac would be 
        entitled to receive a cash bonus or long-term incentive awards 
        for 2008;
            (14) FHFA's five-year Strategic Plan for Fannie Mae and 
        Freddie Mac includes a commitment that the GSEs will operate in 
        a safe and sound manner; and
            (15) section 1318(c) of the Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518(c), 
        as added by section 1113(a)(4) of the Housing and Economic 
        Recovery Act of 2008 (Public Law 110-289; 122 Stat. 2678)), 
        permits the Director of FHFA to ``withhold any payment, 
        transfer, or disbursement of compensation to an executive 
        officer, or to place such compensation in an escrow account, 
        during the review of the reasonableness and comparability of 
        compensation''.

SEC. 3. REASONABLE COMPENSATION.

    (a) Suspension of Current Compensation Packages.--The Director of 
the Federal Housing Finance Agency shall immediately upon the enactment 
of this Act suspend the compensation packages approved for 2010 for the 
executive officers (as such term is defined in section 1303 of the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4502)) of the Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation and, in lieu of such packages, 
establish a compensation system for the executive officers of such 
enterprises in accordance with the rates of pay for positions in the 
Executive Schedule and the Senior Executive Service of the Federal 
Government.
    (b) Clawback of 2009 Compensation.--
            (1) Sense of the congress.--It is the sense of the Congress 
        that each executive officer (as such term is defined in section 
        1303 of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 (12 U.S.C. 4502)) of the Federal National 
        Mortgage Association and the Federal Home Loan Mortgage 
        Corporation should return to the Secretary of the Treasury any 
        compensation earned in 2009 that was in excess of the maximum 
        annual rate of basic pay authorized for a position in level I 
        of the Executive Schedule.
            (2) Use to reduce national debt.--The Secretary of the 
        Treasury shall transfer any amounts referred to in paragraph 
        (1) that are returned to the Secretary to the special account 
        established by section 3113(d) of title 31, United States Code 
        (relating to reducing the public debt).