Senator Proposes Pay Cap: If You Make More Than 400K, You Make Too Much
 

WASHINGTON (CNN) -- One day after President Barack Obama ripped Wall Street executives for their "shameful" decision to hand out $18 billion in bonuses in 2008, Congress may finally have had enough.

"You can't use taxpayer money to pay out $18 billion in bonuses," an angry Sen. Claire McCaskill says.

An angry U.S. senator introduced legislation Friday to cap compensation for employees of any company that accepts federal bailout money. Under the terms of a bill introduced by Sen. Claire McCaskill, D-Missouri, no employee would be allowed to make more than the president of the United States.

Obama's current annual salary is $400,000.

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," an enraged McCaskill said on the floor of the Senate. "They don't get it. These people are idiots. You can't use taxpayer money to pay out $18 billion in bonuses."


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Is Guiliani for reals?

So these people will be making $400,000 a year, yet they won't be able to go to restaurants, buy clothes or anything like that because they won't be getting their bonuses? And it's gonna drive up unemployment? GET REAL.

It's not the taxpayers fault if these a-holes decide to live above their means.

Here's an idea - don't take the bonus out of the economy - use it to pay someone further down the corporate ladder a salary!

And I'm a little bit miffed at all the outrage by politicians - what did you think would happen when you basically wrote them a blank check?

They aren't living above their means, not at all. Where did you get that idea?

Bonus time is a big deal in NYC, as crazy as it sounds. Imagine if you got a check for $1 million dollars, or even $100,000--in addition to your baseline salary. New homes are purchased, and renovations begin like crazy. The premium car dealers on Park Avenue bring out all their new Maybachs and Maseratis, and they sell like hotcakes. Major charitable donations are made. We knew a family who was able to pay for their four kids' Ivy League tuitions with one bonus check. People in the fur industry make enough around this time to sustain them throughout the year. All of this spending at the tippy top has a trickle down effect.

So, Giuliani is right in that the bonuses are responsible for injecting a major amount of $$$ in the NYC economy. Granted, I don't think they should have been using taxpayer money, but to say that bonuses are inherently evil is lazy thinking.

If they can't eat, buy clothes, etc on their $400,000 paycheck (without bonuses, incentives etc) yet they are buying expensive houses, expensive cars--all which you couldn't really do on their paycheck alone. That is living about their means.

I don't think anyone believes that bonuses are inherently evil. It's the AMOUNT of the bonus coupled with other issues.

Again, who said that they couldn't eat? Giuliani said "less spending in restaurants, less shopping at department stores." These people are still making good money, and they're still shopping. They just wouldn't buy AS much as they would under normal circumstances.

The folks in finance that I know here all live within their means. The bonuses just allow them to inject even more money into the economy once a year or so.

Well most people are spending less, but they don't get a yearly bonus. Why should it be different for these people, especially when the head honchos asked for money to keep them afloat?

The way I read it, it sounded as if Guiliani meant to say it as a do-or-die scenario. That if these people don't get their bonuses the economy is gonna go down even more, and that unemployment is gonna skyrocket.

I read it more as Giuliani talking about the trickle-down scenario that Munchkin described (I think, quite accurately).

Dumb idea. There are executives out there that are worth what they're being paid. If you enforce an artificially low salary and ban bonuses these companies are going to wind up in even worse shape because the talent at the top will leave to go to companies that don't have the restrictions (be it non-bailed out firms, foreign firms with major US presence, etc.). An exodus of management isn't going to help anyone.

I agree with that.

The word "socialism" popped into my head when I first heard about this, and whether I am applying the word properly or not, that's what I thought.

Pretty much immediately, everyone who made any kind of money and didn't have a lot of savings would have to declare bankruptcy. Want another huge group of bad loans? Pass this legislation!

Exactly...what about the people that carry a debt load appropriate for someone who makes $1 million+, but not for $400,000? Do we expect them to sell everything they currently own and re-buy at their new salary level? Who will buy the $5 million homes?

If the Wall Street execs are idiots then what does that say about the politicians that voted to give those idiots billions of dollars?

Where are they gonna go when supposedly there are no jobs to be had?