By BEN FELLER, Associated Press Writer AP -
2 hours 7 minutes ago
WASHINGTON - President Barack
Obama issued a withering critique Thursday of Wall Street corporate
behavior, calling it "the height of irresponsibility" for employees
to be paid more than $18 billion in bonuses last year while their
crumbling financial sector received a bailout from taxpayers. "It
is shameful," Obama said from the Oval Office. "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's comments, made with new Treasury Secretary
Timothy Geithner at his side, came in swift response to a report
that employees of the New York financial world garnered an
estimated $18.4 billion in bonuses last year. The figure, from the
New York state comptroller, drew prominent news coverage.
Yet 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.
Lashing out at Wall Street bonuses, Obama said the public
dislikes the idea of helping the financial sector dig out of a
hole, only to see it get bigger because of lavish spending. The
comptroller's report found such bonuses were down 44 percent, but
at about the same level they were during the boom time of 2004.
Vice President Joe Biden also chimed in, saying the level of
bonuses "offends the sensibilities."
"I mean, I'd like to throw these guys in the brig," Biden said
in an interview with CNBC.
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.
The House just approved an economic stimulus plan that would
cost taxpayers more than $800 billion; the Senate is considering
its own version.
Separately, Congress passed a $700 billion plan last year to
shore up the financial sector, one that drew howls of criticism
about a lack of transparency.
Said Obama about Wall Street leaders: "There will be time for
them to make profits, and there will be time for them to get
bonuses. Now is not that time."
Obama said Geithner has already had to step in to stop one
company from taking delivery of a new corporate jet it planned to
buy even after receiving billions of dollars of support from the
government. That bank, Citigroup, canceled the deal earlier this
week.
Obama's strong words overshadowed the other part of his message,
that he wants to roll out, in the coming weeks, new plans to
regulate Wall Street and get more credit flowing to consumers
again. The president considers such steps to work in tandem with
the economic stimulus measures unfolding in Congress.
One idea under consideration by the Obama administration is the
creation of a "bad bank" that could take over soured debt, like
defaulting mortgages, that have corroded the balance sheets of
banks and helped choke off lending. The president did not discuss
that proposal or any others.
The administration may seek approval from Congress for another
round of money, perhaps hundreds of billions of dollars, to help
banks get out of trouble and get credit flowing again. But in his
CNBC interview, Biden said any moves depend first on how the
remaining $350 billion in financial-sector bailout money is
spent.
"It's got to be transparent, it's got to be accountable," Biden
said. "Once we do that and see whether or not we can get this
system kick-started, the credit system flowing more, that's when
we'll make the judgment whether or not anything else is
necessary."