Washington: President Barack Obama lashed out at Wall Street on Thursday, saying it was shameful that employees were paid more than $18 billion in bonuses while their crumbling financial sector received a historic bailout from US taxpayers.
Obama was responding to reports that Wall Street executives were paid billions in bonuses last year as Congress poured hundreds of billions into the financial system to address an economy reeling from souring debt, defaulting mortgages and choked lending.
With new Treasury Secretary Timothy Geithner at his side, the president said the payouts were “the height of irresponsibility.”
“It is shameful,” Obama said. “And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility.”
The president said there was a time for corporate leaders to make profits and take home bonuses but now is “not that time.”
Obama’s comments came as the federal government was in the process of developing new plans for spending $350 billion, the second half of a $700 billion financial system bailout package Congress agreed to at the request of the Bush administration late last year.
That program sits alongside a second huge spending and tax cut measure that passed the House of Representatives on Wednesday night. The $819 billion stimulus package was expected to grow as it works its way through the Senate, with a vote expected in the upper house next week.
Obama hopes to have the money in hand by mid-February as he battles to put a floor under the stumbling American economy in the midst of the worst downturn since the Great Depression of the 1930s.
Obama’s stand also came just one day after he surrounded himself with well-paid chief executives at the White House. He had pulled in those business leaders and hailed them for being on the “front lines in seeing the enormous problems in our economy right now.”
The executives who appeared with Obama are not leaders of the Wall Street financial companies that the president targeted, but rather heads of such well-known manufacturing and technology giants as IBM, Motorola, Xerox and Corning. Still, they get paid handsomely.
Most of those who stood with Obama earned a total 2007 compensation package of between $8 million and $21 million, according to a review by The Associated Press. Those calculations include the executives’ salary, bonus pay, incentives, perks, the estimated value of stock holdings and other compensation.
Obama said he and Geithner will speak directly to Wall Street leaders about the bonuses, which threaten to undermine public support for more government intervention as the economy keeps reeling.
Washington was buzzing Thursday over the fact that Obama failed to win any Republican support when the House approved his stimulus plan, despite his heavy courting of opposition lawmakers in both houses of Congress.
In unanimously opposing the massive spending bill that Obama says is crucial to reviving the economy, Republicans signaled they are not cowed by his November win or his calls for a new era of bipartisanship.
White House press secretary Robert Gibbs said Thursday morning that Obama would continue to work with Republicans to craft a stimulus package supported on both sides of the aisle.
Gibbs told NBC television that Obama understands that “it’s going to take longer than a few days to change the ways Washington works.”
The measure next goes to the Senate and then back to the House with revisions. Lawmakers hope to be have it ready for Obama’s signature by mid-February.
While the stimulus plan may find a friendlier welcome from some Republicans in the Senate, the minority party’s objections mirrored those of their House colleagues.
“We don’t need to have everything Republicans want, but we at least have to feel good enough that the bill actually will grow the economy, create jobs so it’s just not a massive spending bill,” said Republican Sen. John Ensign of Nevada, as several Senate conservatives lambasted the measure at a Thursday news conference.
“This is about spending money we don’t have for things we don’t need,” added Sen. Tom Cobra, an Oklahoma Republican.