Missouri senator calls for $400,000 limit on exec pay

Sen. Claire McCaskill–steaming mad and not going to take it anymore–on Friday called Wall Street executives "idiots" and proposed limits on some of their salaries. Her proposal would force companies taking federal bailout money to limit compensation for any employee to what the president of the United States currently earns: $400,000 a year. "Is that so unreasonable?" the Democrat from Missouri asked. "It's eight times the median household income in the United States of America. … I don't think that sounds like a bad deal." The idea lit up blogs, Web sites and TV screens across the nation, with many applauding her attack on wealthy bankers and investors. "They don't get it," McCaskill said on the Senate floor. "These people are idiots." The compensation cap would cover salary, bonuses and stock options. Critics quickly struck back, calling the plan shortsighted. "It's a stupid idea," said Woody Cozad, a lobbyist, commentator and Republican from Missouri. "I don't defend anyone who's at those companies now, but if they all need to be replaced, you're not going to replace them with anybody very good for $400,000." Rudy Giuliani, a Republican and a former New York mayor, defended bonuses. "If you somehow take that bonus out of the economy, it really will create unemployment," Giuliani said on CNN. "It means less spending in restaurants, less spending in department stores, so everything has an impact." But McCaskill, a confidant of President Barack Obama, was unyielding. One day after the president called bankers "shameful" for giving themselves $18.4 billion in bonuses, McCaskill charged that officials at the first 116 banks that got taxpayer bailout money paid an average of $2.6 million in executive bonuses. She singled out Merrill Lynch, which was sold to Bank of America on Jan. 1. Company executives received billions in bonuses just ahead of the sale, at a time when executives were saying that the firm would fail unless it got federal money. The bonuses were normally paid in January, but the payments were advanced to December, before Bank of America took over. "Merrill Lynch is unbelievable," McCaskill said. "What planet are these people on? What could they be thinking about?" She also slammed banking giant Citigroup for even considering accepting delivery of a $42 million corporate jet. Citigroup has received about $45 billion from the government's Troubled Asset Relief Program. The company reversed course on the jet after urging from the Treasury Department. This week's estimate of $18.4 billion in bonuses for Wall Street executives came from the New York state comptroller, who could not estimate how much of that money" if any–came from taxpayers. So far, Missouri banks have received $641 million under TARP and Kansas banks $77 million. Under McCaskill's legislation, the firms could resume paying their executives whatever they want after the companies had repaid all their bailout money. "My bill says as soon as they pay this back, then we have to take our noses out of their business," she said. At the White House, Obama press secretary Robert Gibbs said the president's coming plan for financial stability also would address executive compensation and bonuses. "I think you will see the president and his economic team outline a plan to deal with what he found irresponsible yesterday," Gibbs told reporters. "Stay tuned, because something on that is coming soon." McCaskill's bill is called the Cap Executive Officer Pay Act. Asked if her legislation had a realistic shot at passing, McCaskill responded by saying times had changed. A similar idea last fall would have died quickly. But not now, she maintained. "We all are mad. Democrats are mad. Republicans are mad. Libertarians, conservatives and everything in between. The president is mad," she said. McCaskill's proposal–and her strong language–triggered an enormous wave of telephone calls and messages to her office Friday, she said. "People are calling from all over the country. It's amazing how the switchboard has lit up," she said.