(5) in February 2009, the Obama Administra-
tion raised the senior preferred stock purchase com-
mitment to $400 billion; 
(6) on Christmas Eve 2009, the Obama Admin-
istration removed any limits on the use of Federal 
funds to cover losses at the enterprises, significantly 
expanding a commitment that has resulted in the ex-
penditure of so far nearly $150 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 nearly 80 
percent of the two GSEs; 
(8) the Congressional Budget Office has con-
cluded that Fannie Mae and Freddie Mac have ef-
fectively become Government entities whose oper-
ations should be included in the Federal budget; 
(9) the GSEs are expected to be a long-term 
drain on the taxpayers as a result of market condi-
tions and the political and public policy mandates 
imposed on them by the Administration and the 
Congress; 
(10) in spite of these liabilities, the Treasury 
Department and FHFA approved compensation 
packages for the chief executive officers of Fannie 
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Mae and Freddie Mac in 2009 and 2010 that were 
nearly 15 times greater than the annual compensa-
tion of the President of the United States and 30 
times greater than the annual compensation of a 
Cabinet Secretary; 
(11) 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 op-
tions that have characterized compensation arrange-
ments at other large financial institutions that have 
received extraordinary government assistance; 
(12) on September 17, 2008, FHFA deter-
mined 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; 
(13) FHFA’s five-year Strategic Plan for 
Fannie Mae and Freddie Mac includes a commit-
ment that the GSEs will operate in a safe and sound 
manner; and 
(14) 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. 
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2678)), permits the Director of FHFA to ‘‘withhold 
any payment, transfer, or disbursement of com-
pensation to an executive officer, or to place such 
compensation in an escrow account, during the re-
view of the reasonableness and comparability of com-
pensation’’. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Housing Finance Agen-
cy. 
(2) EMPLOYEE.—The term ‘‘employee’’ means 
an employee of an enterprise, except that such term 
does not include any employee who would be defined 
as a prevailing rate employee (as defined in section 
5342(2) of title 5, United States Code) if such em-
ployee were employed by an agency (as defined in 
paragraph (1) of such section). 
(3) 
ENTERPRISE.—The 
term 
‘‘enterprise’’ 
means— 
(A) the Federal National Mortgage Asso-
ciation and any affiliate thereof; and 
(B) the Federal Home Loan Mortgage 
Corporation and any affiliate thereof. 
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(4) EXECUTIVE OFFICER.—The term ‘‘executive 
officer’’ has the same meaning as is given such term 
in section 1303(12) of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4502(12)). 
SEC. 4. REASONABLE PAY FOR EXECUTIVE OFFICERS. 
(a) SUSPENSION
OF
CURRENT
COMPENSATION 
PACKAGES.—The Director shall suspend the compensa-
tion packages approved for 2011 for the executive officers 
of an enterprise and, in lieu of such packages, establish 
a compensation system for the executive officers of such 
enterprise in accordance with the rates of pay for positions 
in the Executive Schedule and the Senior Executive Serv-
ice of the Federal Government. 
(b) CLAWBACK OF 2010 COMPENSATION.— 
(1) SENSE OF THE CONGRESS.—It is the sense 
of the Congress that each executive officer per-
forming services for an enterprise on the date of the 
enactment of this Act whose compensation package 
is suspended under this subsection should return to 
the Secretary of the Treasury any compensation 
earned in 2010 that was in excess of the maximum 
annual rate of basic pay authorized for a position in 
level I of the Executive Schedule. 
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(2) USE
TO
REDUCE
NATIONAL
DEBT.—The 
Secretary of the Treasury shall transfer any 
amounts referred to in paragraph (1) that are re-
turned to the Secretary to the special account estab-
lished by section 3113(d) of title 31, United States 
Code (relating to reducing the public debt). 
SEC. 5. COMPENSATION RATE OF EMPLOYEES OF FANNIE 
MAE AND FREDDIE MAC. 
(a) IN GENERAL.—During any period that an enter-
prise is federally chartered under the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et 
seq.) or the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1451 et seq.), the compensation of the po-
sitions held by employees shall be in accordance with this 
section. 
(b) CONVERSION OF COMPENSATION RATE FOR CUR-
RENT EMPLOYEES.— 
(1) IN GENERAL.—Except for as provided in 
section 4, effective for pay periods beginning after 
the date of the enactment of this Act, the Director 
shall fix the rate of basic compensation of positions 
held by employees performing services for an enter-
prise as of the date of the enactment of this Act in 
accordance with the General Schedule set forth in 
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section 5332 of title 5, United States Code. In fixing 
such rate— 
(A) if the employee is receiving a rate of 
basic compensation that is less than the min-
imum rate of basic compensation of the appro-
priate grade of the General Schedule in which 
his or her position is placed, such employee’s 
rate of basic compensation shall be increased to 
such minimum rate; 
(B) if the employee is receiving a rate of 
basic compensation that is equal to a rate of 
basic compensation of the appropriate grade of 
the General Schedule in which his or her posi-
tion is placed, such employee’s rate of basic 
compensation shall be equal to that rate of 
basic compensation of the appropriate grade of 
the General Schedule; 
(C) if the employee is receiving a rate of 
basic compensation that is between 2 rates of 
basic compensation of the appropriate grade of 
the General Schedule in which his or her posi-
tion is placed, such employee’s rate of basic 
compensation shall be at the higher of those 2 
rates under the General Schedule; and 
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(D) if the employee is receiving a rate of 
basic compensation that is in excess of the max-
imum rate of basic compensation of the appro-
priate grade of the General Schedule in which 
his or her position is placed, such employee’s 
rate of basic compensation shall be reduced to 
such maximum rate. 
(2) NOT
CONSIDERED
TRANSFERS
OR
PRO-
MOTIONS.—The conversion of positions and employ-
ees to the appropriate grades of the General Sched-
ule and the initial adjustment of rates of basic com-
pensation of those positions and employees provided 
for by this subsection, shall not be considered to be 
transfers or promotions within the meaning of sec-
tion 5334(b) of title 5, United States Code, and the 
regulations issued thereunder. 
(3) CREDIT FOR INCREASE IN COMPENSATION 
BEFORE ADJUSTMENT.—Each employee performing 
services for an enterprise on the date of the enact-
ment of this Act whose position is converted under 
this subsection to the General Schedule and who 
prior to the initial adjustment of his or her rate of 
basic compensation under paragraph (1) has earned, 
but has not been credited with, an increase in that 
rate, shall be granted credit for such increase before 
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his or her rate of basic compensation is initially ad-
justed under such paragraph. 
(4) SERVICE
PERFORMED
SINCE
LAST
COM-
PENSATION INCREASE.—Each employee performing 
services for an enterprise on the date of the enact-
ment of this Act whose position is converted under 
this subsection to the General Schedule shall be 
granted credit, for purposes of his or her first step 
increase under the General Schedule, for all satisfac-
tory service performed since his or her last increase 
in compensation prior to the initial adjustment of 
his or her rate of basic compensation under para-
graph (1). 
(5) COMPENSATION
INCREASE
UNDER
THIS 
SECTION.—An increase in the rate of basic com-
pensation by reason of the enactment of paragraph 
(1) shall not be considered to be an equivalent in-
crease with respect to step increases for employees 
whose positions are converted to the General Sched-
ule under authority of this subsection. 
(c) NEW EMPLOYEES.—Except for as provided in 
section 4, the grade and rate of basic pay of any individual 
beginning employment with an enterprise after the date 
of enactment of this Act shall be fixed in accordance with 
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the General Schedule set forth in section 5332 of title 5, 
United States Code. 
Æ 
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