GOP Opposes Pay Limits On Bailed-Out Bankers

GOP Opposes Pay Limits On Bailed-Out Bankers

www.huffingtonpost.com

Wall Street bankers, with their $18 billion in bonuses, private jets and gaudy conferences, are causing headaches for the GOP.

President Obama has proposed capping compensation for executives at banks that take taxpayer bailout money at $500,000. Republicans hate the idea -- a position puts them uncomfortably on the side of people currently about as popular as child-porn producers and subprime mortgage brokers.

Senate Minority Leader Jon Kyl (R-AZ) blamed the "tone deaf" bankers for creating the political environment that allows Obama to call for a cap.

"Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That's not a good thing in America," Kyl told the Huffington Post.

"What executives have done is troubling, but it's equally troubling to have government telling shareholders how much they can pay the executives," said Sen. Mel Martinez (R-FL).

(visit the link for the full news article)

During WW2 the government put wage caps in place so there is a precedent.

When we are talking about healthy companies I would tend to agree with the Republicans that what companies pay is up to them, even though I feel that the top ex's are grossly overpaid, especially when they are slashing benefits for the average worker and shipping job overseas.

But when it comes to the companies that not only responsible for this mess and have taken government bailout money... I agree with Obama... though I would slash their wages to a dollar a day.

They won't starve.

www.huffingtonpost.com
(visit the link for the full news article)

I agree.

These companies are receiving federal funds....they are being bailed out by the US taxpayers. They shouldn't get to go about business as usual with their extravagent pay and outrageous bonuses. As long as they receive federal funds, executive pay should be monitored, and at times, capped.

Healthy companies should have no government intervention on pay; they don't need bailing out, they didn't ask the government for a hand-out, so the government should leave them alone.

reply to post by grover


I agree with their point of contention. It does set a bad precedent. The last thing we need is for the government to be telling private businesses how to operate. It can also damage their ability to compete for quality executives when other, healthy companies can offer more.

On the other hand, I also believe that if these businesses are coming to the government begging for a handout, then We The People have the right to dictate the terms of that handout. In this case, I think the government is doing the right thing, and as much as I hate to admit it, I do have to side with Obama on this one, as long as there's no attempt to expand this to healthy companies.

reply to post by vor78


I agree and I'll go a step further and say that the people that received bonuses after the bailout should have to pay them back.

I'm not naive enough to think that it will actually happen but, I would like to think that someone will propose it at the very least.

reply to post by soldiermom
Don't remember where I read it, think it was cnn.com, but the president has asked for them to pay that money back. I do agree that it will never happen.

Of course the GOP disagrees with it. Too bad.

vor, those banks are no longer private businesses. They're on welfare.

We're paying those executives' salaries now. If they don't like it, they can choose an alternative and find another job at a healthy bank as those aren't being capped. It's only the banks who took a lot of money in the bailout that are being capped.

And since they're getting welfare, they have to take what the get. If they can't live on $500k a year, they need to rethink their priorities.

[edit on 6-2-2009 by Benevolent Heretic]

This shouldn't even be an issue because the Businesses should have been left to fail.

Thus, no tax payer money for golden parachutes from Brother-in-laws. I mean America is really losing her way......

reply to post by Benevolent Heretic


As I said, I agree with it. I think both sides have very valid points, but in the end, I have to side with Obama on this one. If they're going to take bailout money, the government, and by extension, the people of this country, have the right to dictate the terms under which they may spend those funds.

Now whether they should have bailed them out in the first place, that's another matter. I think they should've been allowed to go under. These bailouts are severely damaging the economic standing of the country, while also promoting bad behavior by corporate executives who know the government is standing by to save their bacon once they've driven their own companies into the ground.

reply to post by vor78


Yeah.

My comment to you was in response to:

The last thing we need is for the government to be telling private businesses how to operate.

I believe we agree to a large extent on this issue. I just think it's important to realize that the banks went from being private businesses to being welfare recipients when they took the bailout funds.

The constitutionality of the salary caps will be challenged, it will cost WE the People more in the long run, and the caps will be removed.

This is the government after all, and unlike the Ten Commandments, nothing is etched onto stone without LOOPHOLES.

We have to start paying the rich to make laws that do not have the loopholes.

Originally posted by ConservativeJack
This shouldn't even be an issue because the Businesses should have been left to fail.

Thus, no tax payer money for golden parachutes from Brother-in-laws. I mean America is really losing her way......

That would not have been very good for the economy and would have put a nail in this countries coffin actually. You would have gone from 7% unemployment to 30% unemployment over night. That is why the bailout had to happen. The problem has been that with the initial bailouts there was no oversight or regulation put in place to monitor what was being done with OUR money.

I have been following this situation for a while. I can't say that I am pleased that these restrictions were 'portioned out'.

The first notion that pops into my mind was that those who were bailed out were among the most egregious abusers of the financial system's 'blind spots.' That abuse presented itself to us as 'success in enterprise' and we (generally speaking) encourage by the celebrity talking-heads applauded them as savvy businessmen.

I can't help but suspect that at some 'higher' level, financial analysts, in full possession of the details, must have known what they were doing.

Political professionals who are apparently addicted to the revenue of these savvy businessmen, made an effort to eliminate any liability for those who had gained most, essentially eliminating (as seems to be the paradigm) any 'reversing' of that revenue-flow. The mega-financial concerns first in line for rescue; while those who would have their salaries capped were not important enough to warrant immediate rescue.

The 'decision' to make the compensation structure of the initially rescued sacrosanct is, of course, unchallengeable.

It causes me to suspect there are those among them who figure prominently in the 'scam' like manifestation of this economic 'event'.

Whoever made it necessary to be rich to be in politics was a genius.

I fantasize that someday we can implement a political system that makes wealth an irrelevancy to campaigning for public service.

Personally, I would recommend that oaths of public service should include a clause where corporate loyalty is specifically severed when serving. Corporations get citizenship, but are not held to any of the civil obligations "people" are held to. Faceless, without liability, driven to serve an unaccountable leader's agenda; corporations (generally speaking) have become the worst citizens on the planet. And our representative leaders are their fiercest defenders - going so far as to infiltrate the government itself, with impunity. Our Senators and Congressmen dream of their corporate lives after service; as if it were 'step-up'; somehow I think that is not they way most would want it to be.

Originally posted by CaptGizmo
That would not have been very good for the economy and would have put a nail in this countries coffin actually. You would have gone from 7% unemployment to 30% unemployment over night. That is why the bailout had to happen. The problem has been that with the initial bailouts there was no oversight or regulation put in place to monitor what was being done with OUR money.

That's your opinion and what degree do you hold in economics? I have a degree from Penn State.

7% to 30% huh? How do you figure, care to explain that assessment?

The Dow Jones dropped a thousand, from 13 to 12....Then that was used as proof that we needed a bail out. Well, the Dow Jones is hovering at about 8,237. Down 4,000 since the October Bail Out.....

Think about that.

The American people are mostly behind this bill, and I think they're right, in principle.

The unfortunate side is that companies have all sorts of ways of compensating their executives besides salary. They can "pay" their CEO's with stock options, 401k's, Roth IRA's, deferred compensation, unlimited expense accounts, cross company trusteeships, sub holdings, the use of private jets, chauffered cars, and many more ways. In addition executives can claim much of this income as capital gains and pay the lower tax rate. They can also create trust funds for their children and take advantage of a hundred other tax loopholes.

There are thousands of brilliant lawyers in this country who spend their entire time protecting the wealth of the very rich.

The ruling classes will get paid, no matter what happens to the rest of the population.

But government does have the right and the place to tell businesses how to operate because the government is SUPPOSED to represent ALL of us not just the wealthy and corporations.

Cases in point... what does the financial mess and the tainted peanut butter scandal have in common?

Since Reagan movement conservatives have been pushing to gut the FDA and the SEC (among others) and were staunchly opposed by the Dems and more sane and stable conservatives until newt the gingrich and his goons took over with their contract on America scam. Since then budgets have been slashed for these agencies, orders have been given not to enforce or actual regulations have been dismantled and the agencies in question have been staffed with fifth column appointments whose allegence was not to the American people but to their previous employers.

IF the agencies in question had been fully funded and staffed with the actual power to enforce... such things as Bernie Madeoff and default swaps and sub prime mortages and bad food and products would have been stopped far sooner and all of us would have benefitted.

First, the Federal Government demanded the authority of oversight for banks, the markets and lending. Therefore, they have the responsibility for what happened because they were derelict of their fiduciary responsibility. (which seesm to be a trend among federal agencies --- take the power and then fail at your mission. But then, that's another thread).

The Feds then coerced Congress to hand over bailout money to Hank 'Just Trust Me' Paulson by suggesting that the banking system was on the verge of complete collapse and that martial law was a distinct possibility. The situation, The Feds said, was so dire that there wasn't even time to debate the bailout. At the 11th hour a few conditions were inserted by Congress (and then systematicall ignored by Treasury).

And then the banksters went about their business-as-usual, paying bonuses, buying jets, throwing gala's...

And now the outrage. The big guys got their payoff and now we're in damage control mode. There IS precedent for this action (as pointed out earlier) and as primary shareholders of these banks we sure as hell can limit anything we see fit to limit. Banks are NOT lending, credit is still be recalled at an alarming pace, there is very little lending going on and, quite frankly, we are shuffling closer to the abyss daily.

For my money (what little is left of it) I say limit their pay, seize their assets and do whatever is necessary to protect the US taxpayer.

Originally posted by jtma508
First, the Federal Government demanded the authority of oversight for banks, the markets and lending. Therefore, they have the responsibility for what happened because they were derelict of their fiduciary responsibility. (which seesm to be a trend among federal agencies --- take the power and then fail at your mission.

Read what I wrote above carefully... it was a deliberate ploy by movement conservatives in congress to dismantle those agencies by staffing them with people who wouldn't do their jobs or more specifically turn the job they were supposed to do on its head and instead of protecting the public protected the instituitions they were supposed to be watching.

I didn't see your post before writing mine. We seem to be on the same wavelength. I'm not sure, personally, whether it's a large conspiracy or just what I usually see in Federal career empoyees. Protect the retirement, stay under the radad, and for the love of God don't DO anything.

Certainly big business has its hand up the butt of politicians in order to protect their interests and get what they want. But I know (from personal experience) that some of the people appointed to these agencies are extremely well-qualified and capable people. It would seem they are being hamstrung by the whitehouse et al.

reply to post by grover


I found it interesting that the same 'crew' who was responsible for the agricultural fiasco of plowing under crops to eliminate surplus (despite local and global poverty) were then moved the the SEC, just in time for the inflation of the derivatives bubble.

I'm not sure partisanship had anything to do with it. Corporate loyalty drives these people.