The numbers being thrown around on Capitol Hill for an unprecedented financial bailout on Wall Street are so big it's impossible to fully understand what it will mean for us, the folks who will be paying for it. (Actually, our kids and their kids will be paying for it.) After spending $85 billion in taxpayer money to stave off bankruptcy for the American Insurance Group (AIG), the Bush administration wants Congress to immediately act on another $700 billion influx of taxpayer funds to ward off more financial firm implosions.
One of the more wild things about this fast-paced government ride to the rescue is how quickly Congress is being asked to pass the most important legislation with far-reaching consequences than we have seen in a long time. Since we'll be footing the bill, I'd like a few promises from the pols putting it together. Don't tell me I'm still going to get a tax cut when our national debt would rise to $11 TRILLION with this bailout. And there had better be a limit to executive pay and bonuses in the future. Lehman Brothers CEO Richard Fuld received a $22.1 million in compensation, including a bonus, for 2007, it was announced in March. Six months later the 158-year-old investment bank is gone. Gone. How can this be? And how can Treasury Secretary Henry Paulson be so adamantly against tying executive pay to the performance of these companies that will be saved with such a massive infusion of taxpayer money?
So much went so wrong to lead to this financial flame-out, fueled by the sub-prime mortgage lending fury. Things could not have been going as well as company leaders stated publicly, and they clearly (in hindsight) were not going well enough to warrant multi-million-dollar compensation packages. If taxpayers are the ones to bail out these poorly run companies on the brink of failure, then we deserve some assurances that we will not be funding exorbitant salaries and bonuses with this added debt we can ill afford in the first place.
Sound off: Do you think limits to executive pay should be tied to the $700 billion in taxpayer bailout money proposed by the Bush administration?