President Barack Obama says it is irresponsible and shameful for Wall Street bankers to be paid huge bonuses at a time when the American public is dealing with economic hardship.
The president reacted harshly Thursday to reports that corporate employees got paid more than $18 billion in bonuses last year. Obama said, "That is the height of irresponsibility. It is shameful. It's outrageous."
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Barack Obama
The president said he and new Treasury Secretary Timothy Geithner will have direct conversations with corporate leaders to make the point.
Obama said there is a time for corporate leaders to make profits and get paid bonuses but now is "not that time." "You're never going to get any support for the continued tough decisions we have to make if this kind of behavior continues.
White House press secretary Robert Gibbs said the president told his staff of his reaction to the report by the New York state comptroller about bonuses paid by the securities industry to its New York City employees last year.
Obama has said in the past that financial companies that have accepted federal bailout money should limit bonus pay, and Gibbs said Thursday said the administration is studying what it can legally do on the topic.
"I think it was the sixth-largest year of bonuses, and I don't think anybody that's opened their 401(k) statement has found out that this was the sixth best year for Wall Street." Obama met on Wednesday with several corporate chief executives, many of whom have received generous pay packages.
On Capitol Hill, Sen. Chris Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee, said he was demanding that the Treasury Department figure out a way to get the money back.
Meanwhile, the Senate is ready to take up a roughly $900 billion stimulus package, after the House of Representatives passed a version of the measure. Obama has said the fiscal plan is essential to shoring up the economy. But he said it was not the only step that would be needed.
He is considering a plan to fix the worsening crisis in the system in which firms have been unable to lend because of an overhang of bad mortgage debt.
The Obama administration is mulling a range of ideas, including the possibility of a "bad bank" run by the government that would buy up the toxic assets.
Obama, who has blamed the financial crisis on lax Wall Street regulation, has promised to revamp financial rules. "We expect that even as the reinvestment and recovery package moves forward ... these other legs of the stool will be rolled out systematically in the coming weeks so that the American people will have a clear sense of a comprehensive strategy designed to put people back to work, reopen businesses, get credit flowing again," Obama said.
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