White House officials blast Wall Street bonuses

UPDATED:

Obama administration officials on Sunday blasted record payouts to the nation’s top Wall Street executives, calling the bonuses offensive and advocating new financial regulations they say would prevent future taxpayer bailouts.

The nation’s top financial firms, including many who benefited from money paid out by the federal government through the Troubled Asset Relief Program (TARP), are on track to receive billions more in compensation than they did last year.

“The bonuses are offensive,” White House Senior Adviser David Axelrod said Sunday on ABC’s “This Week,” warning companies that took TARP money that “the paymaster at Treasury is working on that, to try and limit that.”

Mr. Axelrod also attacked the banks’ business practices, saying that the government passed out the TARP bailout funds to encourage more lending and said the banks have failed to live up to their end of that bargain.

“The most offensive thing is, we haven’t seen the kind of increase in lending that we should,” he said.

Wall Street payouts were set to increase 20 percent this year over the $117 billion paid out last year, according to the Wall Street Journal. The news was coupled with continuing job losses and stagnant lending — two things the TARP funds, in part, were to curtail.

President Obama’s top political adviser also expressed frustration about the bonuses as indicating that Wall Street has not learned a lesson.

“The bonus is an issue because people are frustrated that Wall Street is back to behavior having just basically four months ago been in a different situation, and the only way they got out of it is through the good graces of the government and the taxpayers,” White House Chief of Staff Rahm Emanuel said Sunday on CBS’ “Face the Nation.”

Sen. Christopher J. Dodd, Connecticut Democrat and Senate Banking, Housing and Urban Affairs Committee chairman, whose financial relationship with Countrywide Financial Services has been targeted by ethics investigators, said he would like to see whether some of the bonuses can be blocked.

“What are these people thinking about at these companies? We have poured a lot of hard-paying taxpayer money into these firms to stabilize them, to get our economy moving again,” Mr. Dodd said Sunday on NBC’s “Meet the Press.”