Obama Calls $18B in Wall St. Bonuses ‘shameful’

Barack Obama Financial Crisis President Barack Obama issued a withering critique Thursday of Wall Street corporate behavior calling it "the height of irresponsibility"

by The Associated Press

Published: Thu, January 29, 2009 - 11:04 pm CST Last Updated: Thu, January 29, 2009 - 11:08 pm CST

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."

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MeAmerican Says:

Sat, Feb 07, 2009 at 8:59 pm

Another move away from capitalism toward socialism/communism. Comrades the Mother Country is in dire trouble!

BamaBob Says:

Sat, Feb 07, 2009 at 8:36 pm

Spent 170 million bucks on the inauguration and wanted 200 million to fix the lawn afterward. geez

Congress just increased their individual petty cash funds by nearly $94,000.00. Most of them already get about 1.2 million in these funds and they are free to use it in any manner they choose. I say we let shareholders worry about what their executives get paid and demand that congress cleans up its act!

FastFred Says:

Sat, Feb 07, 2009 at 6:41 pm

Amongst other items of no value in the stimulus bill,he is giving “ACORN” 4-Billion dollars.They are under federal Investigation for voter fraud.

FastFred Says:

Sat, Feb 07, 2009 at 6:34 pm

By now you have probably read the comparisons to Bush’s inauguration. Bush spent 40 million and the media went nuts stating that money could be better spent for housing for the poor, food for food banks, and programs for school children. I think it was the New York Times that provided a chart for how the money could be better spent. They whined about “fat cats” funding it, and how wrong to have such a celebration at time of war. Obama spends an eye popping 150 million during a time of war and economic crisis, and there is not a peep from the media. This lavish extravaganza makes Bush’s inaugural look like a high school prom in comparison. But we are all used to the media bias by now. No surprise.

FastFred Says:

Sat, Feb 07, 2009 at 6:33 pm

I didn’t hear him say anything about Michelle’s salary increasing when she worked for the hospital.It tripled,not because she earned it,just simply because while he was a Senator he gave that Hospital a 4-million dollar grant.

busterbelle Says:

Fri, Jan 30, 2009 at 6:39 pm

I was so hoping I wasn’t the only one who felt that way!! With all of his pointing the finger, I would love to know how much he spent on his cocktail party and exactly whose pocket that came out of.