Echoing populist Presidential campaign rhetoric, this week Sen. Elizabeth Warren (D-MA) introduced a bill which would eliminate the tax deductibility of most senior executive compensation to fund a 3.9 percent cost of living increase for social security recipients while Rep. Mick Mulvaney (R-SC) proposed limiting Export-Import Bank participation to companies where CEO pay is no more than 100 times that of the median worker. Warren's bill, the Senior and Veterans Emergency (SAVE) Benefits Act (S. 2251), which has 19 Democrat cosponsors, would provide a one-time $581 payment to Social Security, Veterans and similar government benefit recipients by expanding the application of section 162(m) of the tax code to all employees, officers and directors of publicly held companies and eliminating the performance-based exemption for compensation above $1 million. She noted that CEOs of the largest 350 companies saw a 3.9 percent increase in total compensation last year, roughly equivalent to the benefit under the bill, while the Obama Administration announced there would be no cost of living increase in 2016 due to low interest rates. Warren complained that "while Congress sits on its hands and pretends that there's nothing we can do, taxpayers will keep right on subsidizing billions of dollars' worth of bonuses for highly paid CEOs."
On the other side of the aisle, in the House, Representative Mulvaney (R-SC) insisted in comments to MarketWatch that his amendment was not an attempt to use a "poison pill" to scuttle the entire Export-Import Bank reauthorization, which is deeply unpopular among certain Republicans. Instead, reflecting recent populist appeals, Mulvaney stated it is part of a broader effort to refocus the Ex-Im Bank on small businesses, telling Politico that "companies that can afford to pay their CEOs very high compensation packages do not also need taxpayers propping up their export business." Although it was announced Thursday that Mr. Mulvaney's amendment will not receive a vote, the amendment is a preview of how executive compensation may be used as a leverage point in the future.