Candace Quinn and Jose Jara Published in Pension and Benefits Daily
"The Recovery Act's Mechanism to Stimulate the Economy Requires Adjustment: Is More Legislation the Answer?"

Candace Quinn and Jose Jara's article, "The Recovery Act's Mechanism to Stimulate the Economy Requires Adjustment: Is More Legislation the Answer?" was published March 19, 2009 in Pension and Benefits Daily. In their article, the authors discuss the provisions of the economic stimulus act and issues raised by The American Recovery and Reinvestment Act (ARRA) of 2009. Candace and Jose also look into the impact of future congressional efforts to "fix" shortcomings in ARRA, earlier legislation and current regulations.

The authors note, "The ARRA imposes certain prohibition on bonuses and retention or severance payments to the most highly compensated employees of employers that receive funds from [the Troubled Asset Relief Program] (TARP). In addition, ARRA, limits the amount that may be deducted for executive compensation." The authors explain that even though certain contractual arrangements in existence prior of ARRA's enactment are grandfathered, the act requires the Secretary of Treasury to review previously paid bonuses, retention awards, or other compensation to the most highly compensated employees of a TARP recipient to determine if they are inconsistent or contrary to the public interest. They further explain, “Such payments will be subject to renegotiation by Treasury with TARP recipients and the subject employees to repay those amounts to the U.S. government.”

Candace and Jose point out that recent events have caused public outrage due to bonuses being paid based on prior contractual arrangements. According to the authors, the administration and the Treasury should go back and analyze these issues to avoid further public outrage over the use of taxpayer monies. They note, “Congress cannot issue sweeping legislation and expect it to be effective. It will only cause further disruption in corporate economic affairs when economic stimulus is the ultimate goal."