WASHINGTON — President Barack Obama lashed out at Wall Street, saying it was shameful that employees were paid more than $18 billion in bonuses while their crumbling financial sector received a historic bailout from U.S. taxpayers.
Obama was responding to reports last Thursday 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.”
Along with criticism of China’s currency policies by Geithner and Vice President Joe Biden, another signal of the Obama administration’s trade policy was a “buy American” provision attached to White House-backed stimulus legislation moving through Congress.
On Friday, labor leaders visited the White House for a second consecutive day, where Obama signed a series of executive orders that reversed Bush-era policies, which he said should “level the playing field” for labor unions in struggles with management. Obama also formally announced a new White House task force on the problems of middle-class Americans.
Both were meant as a way for the new administration to connect with workers at the end of a week that has seen U.S. companies announce thousands more jobs cuts.
“Over the last 100 years, the middle class was built on the back of organized labor. Without their weight, heft and their insistence starting in the early 1900s we wouldn’t have the middle class we have now, in my view,” Biden told CNBC last Thursday. “So I think labor getting a fair share of the pie is part of it.”
The Middle Class Task Force will be aimed at finding ways to help an economic group that has been hammered by the recession. Biden will lead the task force, comprising a panel of advisers and four Cabinet members.
The orders signed by Obama will:
• Require federal contractors to offer jobs to current workers when contracts change.
• Reverse a Bush administration order requiring federal contractors to post notice that workers can limit financial support of unions serving as their exclusive bargaining representatives.
• Prevent federal contractors from being reimbursed for expenses meant to influence workers deciding whether to form a union and engage in collective bargaining.
When labor leaders visited the White House last Thursday, Obama welcomed them to the East Room as he signed his first major piece of legislation, an equal-pay act that organized labor and women’s groups championed.
Many executive orders are enacted and repealed based on which party controls the White House. One of the rules Obama repealed last Friday was approved by President George H.W. Bush, removed by President Bill Clinton and reinstated by President George W. Bush.
Meanwhile, the Obama administration 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 last Wednesday night. The $819 billion stimulus package is expected to grow as it works its way through the Senate, with a vote expected in the upper house this 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.
Washington has been buzzing 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.
The House vote last Wednesday broke along party lines — 244-188 with 177 Republicans unanimous in opposition, along with 11 mostly conservative Democrats.
White House press secretary Robert Gibbs said 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.
Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses and other benefits last year, an Associated Press analysis reveals. The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue. More »
Arizona Sen. John McCain said the goal of any action must be to allow homeowners to stay in their homes and prevent Wall Street executives from profiting from a taxpayer bailout. More »
"Before approving Paulson’s proposals, Democrats in the legislature must be assured that taxpayers receive an equity interest for buying mortgages at a depressed price and that worthy homeowners who defaulted on their mortgages have relief," the Banner wrote in its Sept. 25, 2008, editorial. "There must also be assurances that executives of the distressed companies are not paid exorbitant salaries at the public’s expense." More »