Anger at bailout turns on fat salaries for Wall Street execs

McClatchy NewspapersSeptember 27, 2008 

WASHINGTON — Sen. Dianne Feinstein's office has heard from about 50,000 constituents since Congress began considering a financial rescue plan about a week ago — and "only one of a thousand supports it — whatever it is," the California Democrat said.

Lawmakers from both parties reported similar confusion and concern among constituents as they spent their Saturday painstakingly, and sometimes painfully, trying to craft a still-elusive compromise package.

Senate Majority Leader Harry Reid and Republican Leader Mitch McConnell aimed to have a final plan ready by 6 p.m. Sunday, in time for the opening of markets around the world.

But House Republicans, whose objections derailed a deal reached last week, warned they did not want any rush to judgment.

"We're not moving on any kind of artificial timeline," said House Republican Whip Roy Blunt of Missouri Saturday afternoon, as talks were about to resume.

Added House GOP Leader John Boehner, "There are still a lot of issues on the table," notably the $700 billion size of the proposed bailout package.

Blunt is the chief House GOP negotiator in the bipartisan talks aimed at reaching a deal. Members were expecting to talk behind closed doors throughout Saturday evening and into Sunday.

Blunt and colleagues from both parties made it clear that they will only sign off on a plan they can explain to constituents as taxpayer-friendly and not a big giveaway to Wall Street.

Feinstein described one source of the outrage: "I'm told that the reason the Treasury Secretary doesn't want limits on executive compensation is because he believes that an executive then won't bring his company in to partake in any program that is set up.

"Well here's my response to that," she said. "We can put that executive on his boat, take that boat out in the ocean and set it on fire if that's how he feels. That's what should happen, or his company doesn't come in."

The senator tends to side on most issues with Democratic liberals and moderates, but her feedback from home was similar to what conservatives were hearing. "People call us and say they're really against bailing out fat-cats. That's a big issue," she said.

"We've heard from hundreds of people who say, 'We pay our bills. Why can't Wall Street pay theirs?''' said Rep. Kay Granger, R-Texas.

Sen. Bob Corker, R-Tenn., said his office had received 3,500 calls in recent days "and just 95 said they supported what we've done so far."

And Sen. Lindsey Graham, R-S.C., reported the number of calls and e-mails was "somewhere between impeachment and immigration,'' referring to two of the most controversial issues of the last 10 years, Bill Clinton's 1998-99 impeachment and trial and the ongoing effort to revamp immigration laws.

The growing discontent also got the attention of the White House, where President Bush tried to talk plain talk to the nation.

"I know many of you listening this morning are frustrated with the situation," he said. "When the government asks you to pay for mistakes on Wall Street, it does not seem fair, and I understand that."

And, he said, "if it were possible to let every irresponsible firm on Wall Street fail without affecting you and your family, I would do it. But that is not possible."

What appears to upset constituents most involves potential executive compensation. While almost everyone supports the concept of limiting the pay of officials at troubled firms, questions remain as to how specific those limits would be.

"We want precision," said Sen. John Kerry, D-Mass., suggesting perhaps even dollar limits on how much an executive could earn.

Treasury Secretary Henry Paulson, the Bush administration's key negotiator, has reportedly balked at being so specific.

Also still being negotiated is how the $700 billion would be spent. Congressional negotiators last week chopped the sum into three pieces — $250 billion ready immediately, another $100 billion when the Secretary certifies the need and a final $350 billion later unless Congress disapproves.

But constituents see that $700 billion number and recoil, Graham said.

"That's got to change," he said.

One compromise circulating Saturday would make a slight but significant change — Congress would have to approve the second $350 billion before it could be spent.

Possibly the thorniest issue involves how to handle a House Republican plan to have the government insure troubled securities rather than buy them. House GOP leaders were still not providing many details of the plan, but wanted it included in the final package.

One idea seriously being considered is to include the plan "as part of the toolbox" the government could use to help companies, said Sen. John Thune, R-S.D.

Many Republican lawmakers besieged by constituents insisted it was a less costly way to help distressed companies, and would reduce the level of government involvement in private industry. Granger called it "not a bailout, but a work-out."

But a lot of others remained skeptical, especially since it was difficult if not impossible to explain to already-leery constituents. House Financial Services Committee Chairman Barney Frank, D-Mass., called the idea a "purely unsubsidized financial scheme."

What constituents want, members said, is not necessarily all the nuances of the package, but a sense that their interests are being heard and protected.

More from McClatchy:

Is the bailout needed? Many economists say 'no'

Economists say House GOP plan would be ineffective, costly

Re-election fears, payback drove House GOP bailout revolt

McClatchy Newspapers 2008

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