Rep. Paul Ryan, GOP Unveil 2012 Budget Proposal

Uploaded by PBSNewsHour on Apr 5, 2011

NewsHour Politics: http://www.pbs.org/newshour/topic/politics/

Rep. Paul Ryan, R-Wis., touted his 2012 budget proposal Tuesday.

The plan would cut some $6 trillion in spending over the next decade

Ryan gets props for bold plan, raps for one-sided focus

 

Rep. Paul D. Ryan of Wisconsin. | Steven Elliott/MCT

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — Budget experts gave high marks for courage and low marks for the details in a bold Republican plan offered Tuesday to slash government spending by about $6 trillion over 10 years while overhauling costly medical programs for the elderly and poor.

The proposals from Rep. Paul Ryan, R-Wis., the chairman of the House Budget Committee, would reverse retirement policies that became staples of American life with President Lyndon B. Johnson's Great Society programs of the mid-1960s. They come against a backdrop of two decades of widening income inequality, in which America's top earners have won ever-increasing shares of society's wealth.

Ryan's is the opening move in a political chess match that's likely to unfold over several years. His plan effectively would end Medicare for seniors, revamp Medicaid for the poor, scrap the 2010 health care law, roll back nonmilitary federal spending overall and lower individual and corporate tax rates.

Ryan's "Path to Prosperity" plan has virtually no chance of enactment in the next two years, with Democrats in charge of the Senate and the White House, because it relies almost exclusively on cutting spending in programs that Democrats cherish. However, the plan does frame a Republican vision for 21st-century government, one that's likely to help American voters choose the future they want in 2012.

Independent analysts praised Ryan for getting ahead of President Barack Obama by daring to propose bold changes to costly programs that, unless overhauled, will send the national debt soaring as baby boomers — 75 million Americans born from 1946 to 1964 — reach retirement age soon.

"I give him credit for putting out a proposal. He's ahead of the president on this, because the president says he cares about debt reduction but hasn't proposed anything specific," said Leonard Burman, a tax and budget expert at Syracuse University.

"I think Chairman Ryan should be commended for his leadership and courage to lay out a specific framework that would achieve spending cuts even greater" than earlier commissions proposed, said David Walker, a former U.S. comptroller general who's crusaded for years on the need to tackle the looming threat of federal debt.

The most controversial part of Ryan's plan is its eventual elimination of Medicare, the federal health plan for seniors, and its significant changes to Medicaid, the joint state and federal program that provides health care to the poor.

Ryan would give states block grants for Medicaid and end federal rules specifying who gets what benefits, leaving those determinations to state governments.

On Monday, 17 Democratic governors wrote congressional leaders to protest Ryan's Medicaid plan, which they said "would shift costs and risk to states. Such a cost shift would severely undercut our ability to provide health care to our residents and adequately pay providers. ... In the face of state and federal budget pressures and rising health care costs, we need federal policy that creates cost savings, not cost shifting."

Under Medicare today, the federal government covers about half the health expenses of Americans 65 and older. Ryan's plan would end this program for anyone who retires after 2021 and replace it with a "premium support" program. Older Americans would choose among several private insurance plans that would operate on a federally regulated exchange. The federal government would subsidize their plans.

The government would save trillions, but costs would shift to retirees. While the government would adjust payments to the broad inflation rate, medical inflation — the rise in health care costs — has outpaced the overall rise in prices across the economy for the past 15 years.

Experts at the nonpartisan Employee Benefit Research Institute, which studies health and retirement issues, said Ryan's plan would affect the healthy and unhealthy quite differently.

"The good news for somebody that's really, really healthy is that they need only $75,000 (in savings) to cover post-retirement medical expenses," said Dallas Salisbury, the president of the institute. "The bad news for people post-age 65, it can be more than $500,000 to $600,000 to pay for" post-retirement health problems.

A senior today, on average, costs the Medicare system about $185,000, half of which the senior pays, Salisbury said. If Medicare ends, affected seniors would have to save at minimum another $90,000 to make up for lost Medicare contributions.

While Ryan's Medicare proposals may be faulted, experts said they confronted a grim reality: The payroll tax would have to triple to cover the cost of promised future benefits, or Medicare spending must be slashed in half to balance the budget. Neither option is politically feasible; hence the need for tough tradeoffs.

"You may like or not like the specifics of what Ryan is proposing ... but hey, something dramatic has to be done, because this is not sustainable," Salisbury said.

On another controversial front, Ryan's plan assumes that tax cuts for the wealthiest Americans would remain in place over the next decade.

"While the problem is primarily a spending problem, it is going to take some additional revenues in order to achieve agreement," Walker said, underscoring that Democrats won't go along with budgets that simply cut spending while leaving tax cuts for the top earners in place.

Treasury Secretary Timothy Geithner warned Tuesday that deficit reduction must allow the expiration of last year's two-year extension of tax reductions for the top 2 percent of earners.

"It's critically important," Geithner said, testifying before the Senate Appropriations Committee. He noted that the country would have to borrow $1 trillion over 10 years to pay for the lost revenue from those cuts. "We cannot afford to do that; it is not a responsible act to do that."

Fiscal watchdogs such as the Concord Coalition say the extension of Bush-era tax cuts for the other 98 percent of earners is equally unaffordable and also should be on the negotiating table for fixing the federal budget.

Ryan proposes bringing individual and corporate taxes down to a top rate of 25 percent, but gives only vague details on how to pay for it, saying unspecified loopholes will have to be closed. In reality, this would involve curtailing popular tax breaks such as the mortgage interest deduction for individuals and a wide range of them for corporations.

In a statement, the U.S. Chamber of Commerce praised Ryan's plan as "an important first step" but was silent on its vague promise to close corporate tax loopholes.

Lowering tax rates was the easiest part of Ryan's plan, Burman said, but it can't be viewed in isolation.

"Cutting the corporate tax rate is a good idea if you could do it in a fiscally responsible way, which he doesn't do," Burman said. "The whole thing sort of locks in place grossly inadequate levels of revenues, and virtually all the deficit reduction is done on the spending side."

Americans, he said, "want a bigger government than he's laying out here, and we ought to figure out a way to pay for it."

On balance, budget experts don't expect changes on the scale of Ryan's plan to become law anytime soon.

"My view is that it's not likely that you are going to see significant actual reforms before the 2012 election," Walker said.

RYAN'S PLAN WOULD:

• Eliminate $6.2 trillion in government spending compared with President Barack Obama's 10-year budget blueprint, $5.8 trillion from current baseline budget projections.
• Reduce federal deficits by $4.4 trillion compared with the president's budget over 10 years.
• Eliminate what it calls $800 billion in taxes called for under the 2010 health care overhaul, and leave in place $1.5 trillion in Bush-era tax cuts over the next 10 years.
• Set the top individual and corporate tax rate at 25 percent while promising to end unspecified loopholes and popular deductions.
• End Medicare in 2021, replacing it with "premium support" programs.
• Replace Medicaid system with block grants to states.
• Freeze most government spending at below-2008 levels.
• Exempt the Pentagon from deep spending cuts.
(David Lightman contributed to this article.) ON THE WEB Ryan plan National commission report Bipartisan Policy Center report CBO report on deficit reduction

The Debt to the Penny and Who Holds It

( Debt Held by the Public vs. Intragovernmental Holdings )

Current	Debt Held by the Public	Intragovernmental Holdings	Total Public Debt Outstanding
04/04/2011	9,650,003,952,066.04	4,593,927,612,150.53	14,243,931,564,216.57

Union Leader Says It’s Time To Start Collecting Signatures

April 1, 2011

By JOSELYN KING Political Writer , The Intelligencer / Wheeling News-Register

BELLAIRE - Groups opposed to Ohio Senate Bill 5 - passed Wednesday - already plan to put the measure up for referendum in the Nov. 2 general election, a local union leader said.
They were just waiting for Gov. John Kasich to sign the bill into law, according to Michael Dossie, president of the Eastern Ohio Education Association. Kasich did that Thursday night.
SB 5 reduces collective bargaining rights for Ohio's public employees.
"Once he signs, the referendum begins," Dossie said.
The law's opponents need to have at least 1,000 initial signatures to begin the referendum process, he continued.
A minimum of 231,148 signatures - equal to 6 percent of the total vote for governor in 2010 - must be gathered to get the referendum on the November ballot, he said.
In addition, petition signatures representing 3 percent of last year's gubernatorial vote must be gathered in 44 of Ohio's 88 counties, according to Dossie.
The referendum must be filed within 90 days of the governor's signature, and those collecting signatures will get 10 days to go out and get more signatures if more are needed. From there, it will go on to the Ohio Ballot Board, where the ballot language will be crafted.
"The language is going to be very simple," he continued. "It's going to ask, 'Shall the law be approved?' Yes or no."
Rep. Alan Landis, R-Dover, was among the 58 Ohio House members voting in favor of SB 5 this week. He termed his vote "a business decision ... and a tough one."
"By voting for the bill, I voted to get it out of the Ohio House," he said. "The passage allows the bill's opponents to put it on the ballot and let everyone decide. I'm in favor of letting the people look at it, and letting the people decide."
Landis said the measure "affects every Ohioan in one way or another."
"We've had a lot of issues not dealt with over the years, and we had to deal with issues of the past so we can move into the future," he said. "In light of our budget deficit, we can't not deal with this."
Rep. Lou Gentile, D-Steubenville, opposed SB 5.
"I voted for my constituents, who don't think it's necessary," he said. "Our top priority in the Ohio House should be to create jobs. This bill doesn't create one job. It hurts the middle class and the local economy.
"What's being done is against the will of people," he added. "Those people in the chamber watching ... you could see their frustration with this process. They don't feel like they're being heard."

Arizona Proposes Medicaid Fat Fee

• APRIL 1, 2011

By JANET ADAMY

Arizona's governor on Thursday proposed levying a $50 fee on some enrollees in the state's cash-starved Medicaid program, including obese people who don't follow a doctor-supervised slimming regimen and smokers.

Associated Press

Arizona Gov. Jan Brewer, center, at her January inauguration ceremony.

The plan, if approved by the Republican-dominated legislature, would mark the first time the state-federal health-care program for the poor has charged people for engaging in behavior deemed unhealthy.
Some companies have insurance surcharges for employees who smoke, but they aren't a staple of government-administered health programs.
Republican Gov. Jan Brewer proposed the idea as part of a broader plan to raise money that would allow the state to offset recent cuts she engineered to its Medicaid program. If ratified, the measure would revive coverage of organ transplants, which Arizona limited last year as a way to save money. It would also reduce the number of childless adults disqualified from Medicaid to 135,000, compared with the original proposal of 250,000.

"If you want to smoke, go for it," said Monica Coury, spokeswoman for Arizona's Medicaid program. "But understand you're going to have to contribute something for the cost of the care of your smoking."
She said the proposal is a way to reward good behavior and raise awareness that certain conditions, including obesity, raise costs throughout the system.
Ms. Brewer's surcharge would apply only to only certain childless adults: Those who are obese or chronically ill, and those who smoke. They would need to work with a primary-care physician to develop a plan to help them lose weight and otherwise improve their health. Patients who don't meet specified goals would be required to pay the $50, under terms of the proposal.
In Arizona, 25.5% of residents were obese as of 2009, according to figures from the federal Centers for Disease Control and Prevention, ranking it about in the middle among states. About 46% of Arizona's Medicaid enrollees smoke daily, according to a 2006 survey by the state's Medicaid agency.
State Sen. Kyrsten Sinema, a Democrat, said such a fee would unfairly penalize those who can't control their weight. "If someone is obese because they're severely disabled or can't exercise, we shouldn't be punishing them," she said. "I mean, it's not their fault." Ms. Sinema said she would vote against the plan—mostly because of the enrollment cuts—and said such changes would require approval by voters rather than lawmakers.
Such a Medicaid fee typically would need authorization from the Centers for Medicare and Medicaid Services in Washington, and federal rules could prevent Arizona from enacting it. Mary Kahn, a spokeswoman for the agency, said no such levy has ever been approved.
Ms. Coury suggested federal rules may not apply to those affected by the proposal, because Arizona extends coverage to them beyond what Washington requires.
Unlike private insurers, which often charge different premiums based on customers' health status, Medicaid must enroll all those who meet its eligibility requirements.
Medicaid's rising cost has become one of the biggest problems for states struggling to balance their budgets. It is one of states' top two expenditures, along with education, and has ballooned in recent years as more people lose jobs and otherwise fall on hard times.
Ms. Coury said Arizona officials hadn't yet finalized how they would determine whether a person was obese or had sufficiently followed a wellness plan, but that measures such as body-mass index could provide some guidance. All childless adults enrolled in Medicare who smoke would be required to pay the annual $50 fee.
If approved as is, the provision would take effect Oct. 1.

Why does James Inhofe support Ivory Coast's Gbagbo?

Posted By Elizabeth Dickinson Wednesday, March 30, 2011 - 5:12 PM

 

As the situation in the Ivory Coast rapidly deteriorates, Sen. James Inhofe (Okla. - R) has written to U.S. Secretary of State Hillary Clinton calling for new elections in the Ivory Coast, a signal of support for outgoing president Laurent Gbagbo who has refused to step down from office after losing an internationally certified presidential ballot in November.
Inhofe's position starkly contradicts the administration's policy on the Ivory Coast, where Gbagbo has been widely accused of targeting civilians and opposition supporters during the four month stand-off. U.S., European, U.N., and African Union policy has called for the outgoing president to step down immediately. Today, the U.N. Security Council slapped tough sanctions on his regime, adding to existing American, European, and African sanctions already in place. 
So how did an Oklahoma senator come to support a man that most see as an obstacle to peace in the Ivory Coast?
Salon got the first bite out of this story, reporting that Inhofe and Gbagbo met through a Christian group known as the Fellowhip. Read that side of the story here.
When I spoke to Sen. Inhofe by phone today, he told me that he had known Gbagbo for years. "We have a lot of friends in common." I asked him if he had been able to communicate with Gbagbo since the November election, to which he replied: "I have been able to, but I have not."
Inhofe first wrote to the State Department to contest the Ivorian elections on February 9, when he says that he provided documented evidence that the vote had been flawed. 
Then, earlier this week, a former member of Gbagbo's outgoing government, Mel Eg Theodore, visited Inhofe to discuss the political stand off in the Ivory Coast. Theodore told me this afternoon by phone that he arrived in Washington from Abidjan just two days ago to meet with U.S. officials about the country's political stand off. He said he "didn't have  chance" to meet with the State Department, but he claimed that evidence of the fraud -- including voting records -- was sent to Foggy Bottom months ago.
"We have received things from those purporting to be from Gbagbo," a state department official told me today. "And we have seen some things that have clearly been manufactured. We know that the U.N. [which certified the election results] has maintained copies of all of the voting records as well.
"We share his concern for the violence on the ground, but we remain clear that Gbagbo must step down."
In his letter to Clinton, Inhofe claims to have spoken with Ivorian officials. He also told me he had conferred with five "sub-Saharan African" heads  of government "who are very close to this issue and who agree [the election] was stolen, no question about that." The heads of state, he said, had chosen not to make their allegations publically in hopes of preventing more bloodshed.
Inhofe writes that he also wants to prevent further bloodshed on the ground in calling for new elections, though a switch in U.S. policy at this stage would likely prolong the political deadlock.
Theodore denied that the Gbagbo government had been involved in committing atrocities against the Ivorian people. "Always it is lies and lies and more lies," he told me.
"Right now there is no fighting in the streets. Abidjan is more than quiet, it is even ghost city."

Isakson: Obama policies fuel higher gas prices

The Truth-O-Meter Says:

"Since President Obama took office, gas prices have gone up 67 percent."

Johnny Isakson on Friday, March 11th, 2011 in a Twitter post

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Some Republicans have repeated an interesting claim about rising gas prices.


U.S. Sen. Johnny Isakson, R-Ga., joined them in a Twitter post.


"Just the Facts: Since President Obama took office, gas prices have gone up 67 percent," the senator wrote.


Isakson included a link to an article with a chart from the conservative-leaning Heritage Foundationthat found gas prices rose 7 percent during the first two years and two months of Republican George W. Bush’s presidency as compared with prices during a similar time span under Barack Obama, a Democrat who took office in January 2009.


We figured Isakson was trying to make a case that Obama is not doing enough to cap rising gas prices. Isakson’s spokeswoman, Lauren Culbertson, told us her boss was indeed making that argument. She said the Obama administration has "contributed to the increase in gas prices" by:

• Restricting domestic energy production.

• Pushing for expanded cap-and-trade regulations through the Environmental Protection Agency.

• Proposing increased energy taxes of up to $90 billion over the next 10 years in his budget.

Some experts dispute the argument that the president can do much about gas prices, saying they are a combination of many factors, such as demand from motorists and nations such as China, along with the rising cost per barrel for crude oil. The United States gets most of its crude oil from Canada, Mexico and OPEC nations such as Saudi Arabia, Nigeria and Venezuela.


"[The president] has limited control over gas prices," said Patrick DeHaan, senior petroleum analyst for GasBuddy.com, an organization aimed at helping motorists find the best gas prices.


First, let’s look at whether the Heritage Foundation got its numbers right.


Crude oil accounts for two-thirds of the price of a gallon of gasoline, according to the federal government. About 10 percent of the cost comes from refining it. About another 10 percent goes toward distribution and marketing. About one-eighth of the cost of gasoline is for taxes.


The foundation’s chart (exact numbers weren’t on the article) shows that average gas prices were slightly below $2 when Bush took office in January 2001. The chart shows prices rose slightly, but were still below $2 in February 2003. Their chart shows gas prices were just below $2 when Obama became president in January 2009 and were $3.10 in February 2011. The Heritage Foundation adjusted its figures for inflation.


The average price for a gallon of regular gasoline was $1.51 the week Bush took office, according to the federal government’s Energy Information Administration. Prices were $1.74 for regular during the last week of February 2003, the EIA reported. That’s a 15.2 percent increase.


By contrast, EIA figures show the average price for a gallon of regular the week Obama took office was $1.83 and has risen steadily since he moved into the White House. During the last week of February, it was $3.34. That is an 82.5 percent increase.


Isakson’s math, courtesy of the Heritage Foundation, is actually lower than the federal government’s totals.


Now, is the context Isakson used to present these numbers on target?


Isakson believes the president should allow more deepwater offshore oil drilling. Obama ordered a moratorium after the disastrous BP oil spill in 2010. The Obama administration approved its first permit since the oil spill, The Associated Press reported last month.


Obama has said domestic oil production rose to a seven-year high in 2010, but others contend that is a result of policies set in place under Bush.


The president has threatened to open the nation’s Strategic Petroleum Reserve to control prices. DeHaan compared that tactic to a classic children’s story.


"That typically cools the market off," DeHaan said. "But we’ve seen so many claims that the traders also discard it. It’s like the boy who cries wolf."


Gas price analysts such as DeHaan and H. Rao Unnava, a marketing professor at Ohio State University, say market speculation and concerns about political unrest in the Middle East have resulted in a rise in crude oil prices in recent months.


In general, they say, gas prices are largely a result of supply and demand.


Federal government data shows fuel consumption rose each year between 2001 and 2007. The average price for regular gasoline also rose in each of those years. The average price rose again in 2008, when the entire nation was feeling the recession, but consumption fell. Consumption has remained steady since while gas prices have risen since the end of 2008.


"I don’t think [rising gas prices] would have much to do with President Bush or President Obama," said Unnava, associate dean of undergraduate programs at Ohio State University’s Fisher College of Business.


Unnava said when gas prices shot past $3 a gallon in the summer of 2006, some conservatives blamed it on increasing demand, particularly in other countries such as China and India. Twenty years ago, China was not among the top five oil consumers. Today, China is second to the U.S.


So where does this leave us? There are two elements to Isakson’s claim: the actual statistics and his implication that Obama is to blame for rising gas prices.


Isakson’s precise statement about gas prices is accurate. They have increased. But the overall statement, intended as a political broadside, leaves out important details and takes things out of  context. We rate this claim Half True.

Report Criticizes High Pay at Fannie and Freddie

By GRETCHEN MORGENSON

Published: March 31, 2011

Brendan Hoffman/Bloomberg News

Michael Williams at Fannie Mae got $9.3 million.

By GRETCHEN MORGENSON

Published: March 31, 2011

 

Jeff Kowalsky/Bloomberg News

Charles Haldeman, Freddie Mac's chief, made $7.8 million in two year

Regulators have approved generous executive compensation atFannie Mae and Freddie Mac, the taxpayer-backed mortgage finance giants, with little scrutiny or analysis, according to a report published Thursday by the inspector general of the Federal Housing Finance Agency.

The companies, whose fates are to be decided by Congress this year, paid a combined $17 million to their chief executives in 2009 and 2010, the two full years when Fannie Mae and Freddie Mac were wards of the state, the report found. The top six executives at the companies received $35.4 million over the two years. Since Fannie Mae and Freddie Mac were taken over in September 2008, the companies’ mounting mortgage losses have required a $153 billion infusion from taxpayers. Total losses may reach $363 billion through 2013, according to government estimates.

Charles E. Haldeman Jr., a former head of Putnam Investments, the giant fund management concern, joined Freddie Mac as its chief executive in 2009. He made $7.8 million for 2009 and 2010. Fannie Mae’s chief is Michael J. Williams, who has worked at the company since 1991. He received $9.3 million for the two years. Company officials declined to comment.

With hundreds of billions in government support necessary to keep the companies running, questions are arising about the nature of the pay packages and how performance goals are determined. The pay was approved by the housing finance agency, which is charged with conserving the assets of Fannie and Freddie on behalf of taxpayers.

“F.H.F.A. has a responsibility to Congress and taxpayers to efficiently, consistently, and reliably ensure that the compensation paid to Fannie Mae’s and Freddie Mac’s senior executives is reasonable,” ’said Steve A. Linick, the newly appointed inspector general of the agency, in a statement.  “This is especially true when you realize that the U.S. Treasury has invested close to $154 billion to stabilize Fannie Mae and Freddie Mac,” and they “are spending tens of millions of dollars for executive compensation.”

The report cited a “lack of standardized evaluation criteria, documentation of management procedures and internal controls” at the oversight agency, missing steps that may have led to overpayments.

For example, the inspector general said that taxpayer support of the companies may have made performance benchmarks easier to meet for executives. In 2009, Fannie Mae issued 47 percent of new mortgage-backed securities, far exceeding its goal of 37.5 percent. But, as the report noted, this hurdle was almost certainly cleared because the Federal Reserve purchased almost all the mortgage securities issued by Fannie and Freddie in 2009.

In response to the report, the housing agency said that it would “institute a more formal and systematic approach” to its review of the performance benchmarks and the assessment of whether they were reached by the companies’ executives. A spokeswoman for the agency said its officials declined to comment.

Lavish executive pay that does not track a company’s performance has led to anger among shareholders in recent years. When the government stepped in to support some of the nation’s biggest financial institutions in 2008, compensation became an issue of concern to taxpayers. Executive pay at institutions receiving support under the Troubled Asset Relief Program, for example, was subject to approval by an overseer, the special master for TARP. Fannie and Freddie were not required to submit to this process because their assistance did not come from TARP.

As the primary regulator and conservator of both companies, the housing agency has broad powers to direct the companies’ activities; it has replaced board members and senior officers, for example. And it can bar the companies from making golden parachute payments to executives. It consulted with the TARP special master on executive pay at Fannie and Freddie after they were rescued by the government.

Nevertheless, the agency delegates pay decisions to the companies’ boards, accepting their recommendations “unless there is an observed reason to do otherwise,” according to the inspector general’s report. The F.H.F.A. receives advice from its own compensation consultant as well as the work of those hired by Fannie and Freddie.

The inspector general’s report noted that the executives at Fannie and Freddie received far more than their counterparts at other federal housing agencies. The top executive at Ginnie Mae, for example, received an annual salary of less than $200,000. The inspector general suggested that the agency review the discrepancy and account for it to taxpayers.

Agency officials say the salaries and deferred compensation awarded to executives at Fannie and Freddie are necessary if they are to attract and keep talent required to run those operations effectively. They say that current pay at Fannie and Freddie is roughly 40 percent less than it was before the bailout and maintain that the compensation plans are based on the companies’ ability to meet financial and performance targets, like providing liquidity and affordability to the mortgage market.

Edward J. DeMarco, acting director of the Federal Housing Finance Agency, testified before Congress on Thursday about proposals to overhaul Fannie and Freddie. “I am concerned that legislation to overhaul the compensation levels and programs in place today with the application of a federal pay system to nonfederal employees carries great risk for the conservatorships and hence the taxpayer,” he said.

Last year, Mr. DeMarco testified that the executive compensation plans at Fannie and Freddie were designed to achieve the goals of the conservatorship and “align executive decision-making with the long-term financial prospects of the enterprises, and minimize costs to the taxpayer.”

Because shares of both Fannie and Freddie have little value, the companies’ executive compensation consists solely of cash paid out in base salary, deferred salary and long-term incentive pay.

But Brian Foley, a compensation consultant in White Plains questioned the characterization of the companies’ incentive pay as long term, given that it is paid entirely within two years. “One hundred percent of the compensation is paid for two-year performance and a fair portion of that is without regard to performance,” he said. “I understand the stock is worthless, but that doesn’t mean you can’t have cash on the table for a long period. If anybody needs to have good long-term performance, isn’t it Fannie Mae and Freddie Mac?”