Two Republican lawmakers have proposed legislation that would prevent mortgage giant Freddie Mac from hiring a CEO at a salary of millions of dollars a year.

Federal Housing Finance Agency Director Mel Watt has asked Freddie Mac to propose a legislative package for a CEO who could earn more than $7 million each year to run the agency. But Reps. Ed Royce (R-Calif.) and Bruce Poliquin (R-Maine) put forward a bill last week to ensure taxpayers never pay that much.

Rep. Ed Royce (R-Calif.) is hoping to shut down a plan that could allow the CEO of mortgage giant Freddie Mac to earn millions of dollars each year. AP Photo/Charles Dharapak

Freddie Mac is one of two government-sponsored enterprises (GSEs) that help millions of Americans finance mortgages. They do so by buying up mortgages from lenders who are then free to make additional mortgage loans.

Because of the housing and mortgage crisis in 2008, both Freddie Mac and Fannie Mae were pushed into conservatorship by the federal government, which many argued was essentially a bailout of the housing market that taxpayers would shoulder.

Royce said paying the Freddie CEO millions of dollars a year would only expand that bailout.

"I'm deeply disappointed with Director Watt's decision to open the door to multi-million dollar salaries at the GSEs, which continue to be propped up by taxpayers," Royce said last week. "It's imperative that we reform and wind down the failed duopoly of Fannie and Freddie before their model of public losses and private gains once again places taxpayers at risk."

Royce also said there are signs that taxpayers may still be on the hook for billions more, and said it's "unconscionable" to consider the idea of huge salaries at Freddie Mac when many American families are still struggling. He said the government needs to move away from the current Freddie and Fannie model, since both GSEs currently act like private corporations even though they leave "taxpayers on the hook for losses."