The House Financial Services Committee approved a bill Tuesday by a 52 to 4 vote that would limit executives' salaries at Fannie Mae and Freddie Mac and remove any extra "bonus" pay.

The bill, sponsored by Chairman Spencer Bachus, R-Ala., would cap top executive pay to $218,978 — a sharp contrast from the nearly $6 million compensation package Fannie and Freddie's CEOs now receive.

"The taxpayer funded bailout of Fannie Mae and Freddie Mac is the biggest bailout in history," Bachus said in a press release. "Adding insult to injury, the top executives of these failed companies receive multi-million dollar pay packages, all courtesy of American taxpayers who are having a difficult time making ends meet these days."

The legislation would align pay practices at the two companies with federal financial regulatory agencies. It would not, however, make the executives federal employees. Fannie and Freddie were taken into conservatorship in September 2008 and have received $170 billion in taxpayer support to prop up the two entities.

Testifying before the Senate Banking Committee, acting director Edward DeMarco earlier on Tuesday sought to correct media reports that suggested executives had received $12.8 million in pay in 2010 as "bonuses."

"That number is the sum of $7.5 million in deferred pay and $5.3 million in target incentive opportunity payments," he said.

He also made the case for such sizable compensation packages, explaining the difficulty the Federal Housing Finance Agency has had in retaining talent during a period of turmoil and uncertainty at the two companies.

"Executives who have spent a career developing their reputations risk tarnish to those reputations under the highly-charged environment in which these companies operate today, regardless of how well they perform their duties or how great a financial sacrifice they make forsaking other private sector opportunities to assist the country's housing finance system," said DeMarco.

He, along with Michael Williams, president and CEO of Fannie and Charles "Ed" Haldeman CEO of Freddie, testified before the House Committee on Oversight and Government Reform on executive compensation this morning at 10:00 a.m.

Please see related story from ASR sister publication American Banker published on titled Fannie, Freddie CEOs Defend Pay Packages. Please click this link for a copy of the article.

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