By Dana Milbank
Tuesday, September 23, 2008
It's about time somebody in this town stood up for the big guy.
After 7 1/2 years of drift, President Bush has finally returned to his compassionate conservative roots with a heartfelt plea to Congress to help a needy and deserving group: those Wall Street CEOs who, for all their hard work, have been unable to lift themselves up by their wingtips.
Treasury Secretary Hank Paulson (R-Goldman Sachs) made the rounds of the talk shows on Sunday, pleading for financial executives to be allowed to keep their multimillion-dollar compensation packages even if their companies need to be rescued by the $700 billion federal bailout.
"If we design it so it's punitive and so institutions aren't going to participate, this won't work the way we need it to work," Paulson, whose net worth is said to be north of $600 million, told Chris Wallace on "Fox News Sunday."
"To have this program work, we don't want to make it punitive and make it difficult," Paulson advised George Stephanopoulos on ABC's "This Week."
It was a message of mercy and humanity -- who, after all, would be so cruel to deny executives their eight-figure bonuses merely because they drove their companies into insolvency? -- and administration officials and Republican lawmakers joined the cause of the unappreciated CEOs.
"While it is very appealing to think about executive compensation as being a part of this, one of the drawbacks to that is perhaps that we would have fewer entities participate in what is essentially a voluntary act," Sen. Mel Martinez (Fla.) said on CNBC yesterday morning.
"It should be up to the board of directors of a private corporation to set the compensation of an executive; it shouldn't be Congress's role," Sen. Richard Shelby (Ala.) proclaimed on CBS News.
Bush issued a statement yesterday warning lawmakers not to "insist on provisions that would undermine the effectiveness of the plan," and White House press secretary Dana Perino, asked about Democrats' plans to limit executive compensation, advised them to pass the legislation as Paulson proposed it, "the cleaner the better, and the quicker the better."
Mitch McConnell (R-Ky.), the Senate minority leader, went to the floor to decry those who would make the bailout legislation "flypaper for partisan add-ons."
As it happens, the U.S. Mint held a ceremony at the Lincoln Memorial yesterday morning to unveil designs for a new penny in time for Abraham Lincoln's 200th birthday next year. But at the other end of the Mall, Lincoln's successors in the Republican Party were battling the impression that they were building a government of the plutocrats, by the kleptocrats, for the oligarchs.
Barney Frank (D-Mass.), chairman of the House banking committee, made his way into the House media gallery to face 75 reporters yesterday afternoon. The hard-hearted chairman hitched up his trousers, took his seat, and showed no remorse toward the CEOs who stood to lose so much.
"The Endangered Species Act apparently does not apply to financial institutions," he joked, cruelly.
He vowed, callously, that there will be "no golden parachutes while we are the owners" of Wall Street firms' bad debts.
"It's inconceivable that people would say the taxpayer should put some money at risk because of bad decisions made by people who would then continue to be rewarded without any restriction and, in fact, would be rewarded for their mistakes," the merciless chairman argued.
He then cynically turned Paulson's defense of the Wall Street executives upside down. "Let me defend CEOs against Hank Paulson's attack on them," Frank said with feigned sincerity. "Here is this absolutely essential program that's needed to keep the economy going, but there are CEOs who won't participate in it if a few of their many millions are going to get nicked? That's really what he's saying, that some CEOs put their ability to get unrestricted excessive compensation, including rewards for failure, over and above trying to cooperate and help the economy. If that's true, we're in worse shape than we think."
It was a brazen attempt to exploit the suffering of the CEOs, but it was irresistible to Frank's fellow Democrats.
"If you're taking a federal dollar to bail yourself out, you ought to get a federal salary," Sen. Jim Webb (Va.) said on the Senate floor.
"It is wrong to have executives who have created all kinds of problems and cost the taxpayer millions, if not billions, then walk away with golden parachutes," Sen. Chuck Schumer (N.Y.) told MSNBC.
Confronted with such demagoguery, the Republicans by day's end were beginning to falter in their compassion for the struggling CEOs. After Republican presidential nominee John McCain came out against golden parachutes for bailed-out executives, Rep. Louie Gohmert (Tex.), talking with fellow opponents of the rescue plan, told The Post's Paul Kane that golden parachutes are "repugnant."
After a meeting with the Senate banking committee chairman, Chris Dodd (D-Conn.), Sen. Bob Corker (R-Tenn.) was ready to sacrifice the needy CEOs on the altar of expediency. "There are things sometimes one has to accept to reach a solution," he told The Post's Lori Montgomery.
Even Martinez, who only hours earlier was on television defending the CEO pay provisions, was now of the opinion that "there needs to be some language involving executive compensation."
It was enough to make a big guy feel small.