Just that Fast, WaMu Punishment Axed

Just minutes, quite a few but it wasn’t hours, ago I posted a story from the Seattle Times showing that Washington Mutual employees sticking around until the transition to Chase is complete could be punished for AIG’s bad doings. U.S. Rep. Jay Inslee, D-Bainbridge Island, just sent a press release about his amendment to protect severance packages like the ones Washington Mutual employees would get.

You can read Inslee’s press release and a copy of the amendment after the jump.

Here’s the press release:

Inslee amendment preserves WaMu severance packages for transitional workers

WASHINGTON, DC –  U.S. Rep. Jay Inslee (D-Wash.) successfully placed an amendment to protect severance packages, like those promised to former employees of local bank Washington Mutual, in a House bill that prohibited the payments of any compensation that’s not “performance-based” by recipients of funding from the Troubled Assets Relief Program (TARP).

Inslee crafted an amendment to allow TARP recipients to continue to offer severances packages  to laid-off employees, making sure that victims of the troubled economy – hard-working, long-time employees who haven’t done anything wrong —  aren’t unfairly denied severance packages when Congress is working to  restrict “unreasonable and excessive compensation” in bonuses.   Inslee worked with the Financial Services Committee to get the amendment included in the manager’s amendment, which was agreed to by voice vote.  He issued the following statement upon House passage of the bill, H.R. 1664, by a vote of 247-171:

“Only ‘performance-based’ compensation would have been protected under this legislation, which means that severance packages like those promised to Washington Mutual’s transitional employees might have been prohibited.  That is unconscionable.

“Severance packages are often the lifeboats that keep families afloat as wage earners transition to new jobs or careers.  In this economy, it’s important that we take care of hard-working families who have played by the rules, done nothing wrong, and paid the price all the same with the loss of their jobs.

“I heard from many of my constituents whose financial security was put at risk by legislation like this, and I’m pleased to be able to work for my constituents in this way help them.

“I have also heard from many constituents with concerns about the potential effect of the so-called ‘ninety percent tax’ on Washington Mutual severance packages for transitional employees.  There appear to be conflicting opinions from experts on whether or not those severance payments would be subject to a tax under that legislation.   I am seeking final clarification from the Congressional Research Service on that issue.  Should the severance packages be determined to be subject to the tax and the bill passes out of the Senate, I will continue to work with the conference committee to protect this type of compensation for the hard-working employees of the Washington Mutual transition team and their families.”

Inslee’s ammendment (pdf)

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