President Obama on Sunday signaled his disapproval of a House-passed measure to highly tax executive bonuses, warning against governing “out of anger.”
In an interview with CBS’ “60 Minutes,” Mr. Obama expressed support for Treasury Secretary Timothy F. Geithner but questioned the pending bill. He said laws shouldn’t target a “handful” of people but rather have broad applicability.
The House voted 328-93 last week to impose a 90 percent tax on bonuses given to the top earners at banks and other financial institutions receiving $5 billion or more in taxpayer funds as part of the government bailout. The measure slowed when it reached the Senate, and Obama advisers said on talk shows Sunday that they aren’t sure it’s the best plan.
“Let’s see if there are ways of doing this that are both legal, that are constitutional - that uphold our basic principles of fairness, but don’t hamper us from getting the banking system back on track,” Mr. Obama said in the interview, taped in the Oval Office on Friday.
He said he doesn’t want to use the tax code as punishment.
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Mr. Obama said as the country digs itself from the “economic hole,” he will emphasize: “[W]e can’t govern out of anger. We’ve got to try to make good decisions based on the facts, in order to put people back to work, to get credit flowing again.”
The president said replacing Mr. Geithner has not been discussed, despite public pressure for the Treasury secretary to resign. He said for the first time that Mr. Geithner has so much work to handle in part because vetting is so tough for government officials.
“I take responsibility for not having given him as much help as he needs,” Mr. Obama said. “This whole confirmation process … [has] gotten tougher in the age of 24/7 news cycles.”
He said people had turned down high-level Treasury positions for that reason and because the job would mean a pay cut.
“Not because people didn’t want to serve. … The process has gotten very onerous,” Mr. Obama said.
Mr. Obama told “60 Minutes” correspondent Steve Kroft that he wants to communicate to Wall Street that “they can’t expect help from taxpayers, but they enjoy all the benefits that they enjoyed before the crisis happened.”
He said the financial sector was out of balance. He suggested that it’s unfair that investment bankers make 200 times the salary of teachers, especially since 25 years ago, it was expected that they would earn 20 times more than educators.
Mr. Obama said systemic risks remain.
“If all those financial institutions fail all at the same time, then you could see an even more destructive recession and potentially depression,” he said. “I’m optimistic about that not happening. Because I think we did learn lessons from the Great Depression.”
He lamented the massive job losses since taking office in January but said there was a “potential silver lining” that with the fast-paced modern economy, the recovery could happen faster than expected. Mr. Obama added that he is starting to see “flickers of hope” with refinancings on the rise and low interest rates.
“That promises the possibility at least of the housing market bottoming out and stabilizing,” he said. “It’s not going to happen equally in every part of the country.”
The president said sending 17,000 troops to Afghanistan was the hardest decision he’s had to make and outlined his view of the mission there - a No. 1 priority of “making sure that al Qaeda cannot attack the U.S. homeland and U.S. interests and our allies.”
He said a comprehensive strategy that encompasses more than military action must be established and that there must be an “exit strategy … a sense that this is not perpetual drift.”
He said commanders on the ground think “Iraq was actually easier than Afghanistan” because of the terrain and the more educated population in Iraq. “This is going to be a tough nut to crack. But it is not acceptable for us to simply sit back and let safe havens of terrorists plan and plot,” he said.
Asked what the most frustrating part of the job is, Mr. Obama sighed and said he is “often confronted with bad choices that flow from less than optimal decisions made a year ago, two years ago, five years ago, when you weren’t here.”