Senator wants pay cap on Wall Street

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By Sean Lengell

A day after President Obama unleashed a scathing rebuke of corporate America, Sen. Claire McCaskill introduced legislation Friday that calls for capping executive salaries at companies that accept federal dollars because of the economic downturn.

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," the Missouri Democrat said on the Senate floor Friday, a day that also saw the top Republican senator on finance issues harshly criticize Wall Street pay.

Under Mrs. McCaskill's proposal, employees of companies that receive money from the Treasury Department's $700 billion Wall Street bailout fund, called the Troubled Asset Relief Program (TARP) would not be able to make more than the U.S. president -- $400,000 -- until the company no longer relies on federal assistance.

The cap would include salary, bonuses and stock options. It also is common for top executives at Fortune 500 companies -- the relevant talent pool -- to make tens of millions in salary, with stock options and bonuses reaching the hundreds of millions.

Mrs. McCaskill said she was appalled that the average pay of executives of the first 116 banks that got TARP money was $2.6 million.

"They don't get it. These people are idiots," she said. "Once they're off the public dole, once the taxpayers aren't footing the bill, then it's not as much our business what they get paid. But right now, they're on the hook to us."

Mrs. McCaskill's legislation comes on the heels of an angry reaction by Mr. Obama to news reports Thursday that Wall Street handed out $18.4 billion in bonuses last year, calling the payments "the height of irresponsibility."

"It is shameful," Mr. Obama said from the Oval Office on Thursday. "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."

Sen. Charles E. Grassley of Iowa, the ranking Republican on the Senate Finance Committee, applauded the president's comments, saying executives who "run their companies into the ditch should beg for forgiveness, not rewards."

"President Obama is right," Mr. Grassley said. "The president should use his full power to pull back bonuses for bailout recipients. That includes past recipients and those going forward."