Let Us Talk

February 4, 2009

President Obama Plans Salary Limits For Bailout Recipients

Obama Commerce Secretary  Most Divinity Schools/Seminaries do not accept Pell Grants (financial aid from the federal government available to students) because they do not want the government to tell them how to administrate their schools.  The thinking is, if you don’t want government interference in your business, then manage your business well so you don’t have to beg the government for money.

Like the rest of us, President Obama has been watching the way that  banks who received ‘exceptional assistance’ have been conducting business as usual — as if they they’re in the black with a trillion dollar profit.  There has been no apparent curbing of spending even though they borrowed billions from us the United States taxpayers.  Even while they lay off employees the executives of these banks are spending money flippantly and frivolously.

President Obama has decided that since the executives are not being responsible and seemingly cannot manage themselves he will intervene and implement a series of pay curbs including a strict new limit on executive salaries at these institutions.  Under the new rules, companies like Citigroup that received “exceptional assistance” from taxpayers may not pay any top executive more than $500,000 a year.  Any additional compensation would have to be in restricted stocks that cannot be sold until the companies pay back the money they borrowed from the government.

In addition all banks receiving help will face tougher restrictions, including requirements that shareholders have a say on compensation, and will face tougher disclosure rules on items such as aviation services, holiday parties and golden parachutes.

Institutions that are financially healthy — and receive more generally available government funds — can waive these requirements if their shareholders vote to do so, according to the plan.

“The American people understand we’ve got a big hole that we’ve got to dig ourselves out of, but they don’t like the idea that people are digging a bigger hole even as they’re being asked to fill it up,” Obama said.

Congress also was furious, with Senator Claire McCaskill, (D-Missouri) introduced legislation to cap compensation at bailed-out companies to no more than the salary of the U.S. president.

President Obama’s annual salary is $400,000.

“We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer,” an enraged McCaskill said on the floor of the Senate on Friday. “They don’t get it. These people are idiots. You can’t use taxpayer money to pay out $18 billion in bonuses.”

Yeah!  Our government is standing up for its citizens!

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