Forked TONGUE Senator DODD

[cobra bill]

Once more you guys are getting your information from the republican Pravda, it's all lies and one day maybe, you guys will open your eyes and quit drinking the cool aid.



(From THE WALL STREET JOURNAL)
By Deborah Solomon and Mark Maremont
WASHINGTON -- The giant stimulus package includes a last-minute, little-noticed addition that restricts bonuses for top earners at firms receiving federal cash -- including those that already received it -- more severely than the Obama administration's previous pay limits.

The most stringent pay restriction would bar any company receiving funds from paying top earners bonuses equal to more than one-third of their total annual compensation. That could severely crimp pay packages at big banks, where top officials commonly get relatively modest salaries but often huge bonuses.

As word spread Friday about the new and retroactive limit -- inserted by Democratic Sen. Christopher Dodd of Connecticut -- so did consternation on Wall Street and in the Obama administration, which opposed it.

The administration is concerned the rules will prompt a wave of banks to return the government's money and forgo future assistance, undermining the aid program's effectiveness. Both Treasury Secretary Timothy Geithner and Lawrence Summers, who heads the National Economic Council, had called Sen. Dodd and asked him to reconsider, these people said.

In contrast to executive-pay rules announced recently by the White House, those in the stimulus bill -- which cleared the House Friday afternoon and was headed for a Senate vote -- wouldn't apply just to top executives but could reach into the ranks of highly paid traders and department heads. The rules would apply to any company that has received aid under the bailout program since it began in October.

The number of a company's employees affected increases on a sliding scale, depending how much federal money the firm receives. More than 350 banks have gotten funds from the government's formal investment program. In addition, the government has proffered aid to insurer American International Group Inc., to auto makers General Motors Corp. and Chrysler LLC, and to Citigroup Inc. and Bank of America Corp.

In speaking to Mr. Dodd, Messrs. Geithner and Summers also expressed concern over another provision he inserted that lets banks and other aid recipients pay back aid more easily. It says banks would no longer have to raise new private capital to replace the government's funds in order to repay it. Some government officials fear the result could be that banks lose their capital cushions and thus become even more wary of lending.

Sen. Dodd said in a statement that "the decisions of certain Wall Street executives to enrich themselves at the expense of taxpayers have seriously undermined public confidence in efforts to stabilize the economy. . . . With vigorous oversight by the Treasury Department and by Congress, these tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses."

With so much riding on the stimulus bill, President Barack Obama is expected to sign it despite his concerns. The pay-limit language in the stimulus bill is vague and open to interpretation. It's not clear, for example, whether the value of stock options should be included in the calculation of total compensation. The provision could be altered somewhat by the Treasury, which would be in charge of implementing the regulations.

A White House spokesman said, "As he has already expressed, the President shares a deep concern about excessive executive compensation at financial firms that are receiving extraordinary assistance from American taxpayers. He looks forward to working with Congress to responsibly address this issue. Members of the administration contacted members of Congress with suggested technical changes toward that end."