January 29th, 2009
04:32 PM ET
9 years ago

Obama blasts bonuses for struggling Wall Street

[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/01/29/art.obamageithner0129.gi.jpg caption="President Obama rebuked Wall Street Thursday during a meeting with new Treasury Secretary Timothy Geithner."]
WASHINGTON (CNN) - President Barack Obama called the prospect that some of the $700 billion Wall Street bailout could end up paying for bonuses to managers of struggling financial institutions "shameful" Thursday.

Watch: Pres. Obama takes Wall St. to task

New York's state comptroller raised that prospect in a Wednesday report that found the bonus pool for the financial industry is still the sixth-biggest on record despite a 44 percent decline from 2007. Speaking after a meeting with his top economic advisers, Obama said it was the "height of irresponsibility" for executives to pay bonuses when their companies are asking for help from Washington.

"The American people understand we've got a big hole that we've got to dig ourselves out of, but they don't like the idea that people are digging a bigger hole even as they're being asked to fill it up," he said.

"There will be time for them to make profits, and there will be time for them to get bonuses. Now is not that time," Obama added.

The president's latest concerns come two days after struggling banking giant Citigroup - which has taken about $45 billion from the government's Troubled Asset Relief Program - reversed plans to accept delivery of a new $42 million corporate jet under Treasury Department prodding.

"We shouldn't have to do that, because they should know better - and we will continue to send that message loud and clear," Obama said.

The bailout program restricted bonuses for top executives of firms that received federal funds. But New York Comptroller Thomas DiNapoli's report Wednesday noted that the program does not limit bonuses for lower-level staff.

"There needs to be greater transparency and accountability in the use of these funds," DiNapoli said in a statement accompanying his report. "Every dime counts, especially when they're taxpayer dimes, and taxpayers ought to know if
these funds were used to buy corporate jets, pay dividends or bonuses."

White House spokesman Robert Gibbs said the president had a one-word response to DiNapoli's report: "Outrageous." Asked whether the administration
could take any action to head off those bonuses, Gibbs said, "That's what we're
looking into, and that's what we're working on recommendations for."

Obama's remarks came after a meeting with Vice President Joe Biden, Treasury Secretary Tim Geithner and other members of his economic team.

Filed under: Economy • President Obama • Tim Geithner
soundoff (120 Responses)
  1. Lee-- Dallas, TX

    It sounds like President Obama means business. These Wall Street Jokers are in for it. If we poor folks or less than wealthy have to tighten our belts and spend responsibly then so should they.

    January 29, 2009 05:02 pm at 5:02 pm |
  2. Lisa in CA

    I would think the time has come to mandate a temporary reduction in interest rates across the board. At least if I have more money in my pocket, I can buy things and help stimulate the economy thereby paying myself back. If the financial institutions don't like it, too bad. They should have been more responsible with my money.

    January 29, 2009 05:05 pm at 5:05 pm |
  3. Jeff, IN

    Rush Limbreath is an idiot. All those Rethug senators and congressmen listening to him are also idiots. Rush is not the king of America, grow a brain people. Rush is an idiot.

    January 29, 2009 05:05 pm at 5:05 pm |
  4. Southern Princess

    Shameless crooks. Throw the bastards in jail.

    January 29, 2009 05:07 pm at 5:07 pm |
  5. CTP

    Now do something about these idiots!

    January 29, 2009 05:07 pm at 5:07 pm |
  6. Uche

    Stick it to them Mr. President! What a bunch of imbeciles!

    January 29, 2009 05:08 pm at 5:08 pm |
  7. garin

    Those bonus-hungry thugs of wall street are perhaps gazillion times worse than even the lowest forms of life on earth. Somebody has used a term "economic terrorists" for such wolves. Let us explore the possibility of enacting laws to punish those scoundrels, quickly.

    January 29, 2009 05:09 pm at 5:09 pm |
  8. Snake eyes



    January 29, 2009 05:10 pm at 5:10 pm |
  9. James

    I work on Wall St and got 20k last year as a bonus. You want to know how much was taken from that check in taxes? 10k. That is what's shameful. Bonuses get gutted by the feds, so before the President starts crying about Wall St abuses maybe he should take a look at the cut he's getting. Oh an just in case someone wants to say i should count my blessings, tell them to go buy $7 bacon in NYC or pay $1700 for a 200sq ft apt. I'm from Georgia and money doesn't go as far up here. Google a cost of living calculator and see how much 87k(30k was taken out in taxes so technically its 57k disposable income) gets you in NYC. It's about 35k in most places outside NYC.

    January 29, 2009 05:11 pm at 5:11 pm |
  10. Andy

    As far as these people are concerned, the American people can go take a flying leap off a tall cliff. Every man for himself, you betcha!

    January 29, 2009 05:12 pm at 5:12 pm |
  11. nick

    Every tax payer, every invester, every worker who saw their 401k plan reduced, ought to find alternative investment opportunities, rather than doing business with these firms again. I know I will.

    January 29, 2009 05:14 pm at 5:14 pm |
  12. Debbie

    Nice of George W and his cronies to simply throw 700B at a bunch of skunks with no strings and no accountability.

    January 29, 2009 05:16 pm at 5:16 pm |
  13. Matt

    The financial sector is about to get very VERY angry at Obama and the Democratic party, but they can go sulk on their $30,000 toilets for all we care...they were in bed with the GOP to begin with anyway. Sounds like he's getting ready to oversee the second $350B the way it should have been overseen the first time and I bet there will be fewer companies asking for it this time as a result.

    I just wish Obama would take it a step further, investigate what was done with the first $350B and prosecute or force pay-backs from the people who misused it.

    January 29, 2009 05:16 pm at 5:16 pm |
  14. Matt

    Banks: "Oversight? Oversight? Oh, suddenly we don't need the free money anymore...we'll be fine."

    January 29, 2009 05:17 pm at 5:17 pm |
  15. Michele

    The tax payers are the ones that should get a bonus.....it is our money funding Wall Street and the banks now. Don't know about anyone else but I could use a bonus Mr. Bank!!!!!

    God Bless our local banks.......they should have received bailout money....they are the ones lending!

    January 29, 2009 05:18 pm at 5:18 pm |
  16. J

    What people do not understand is that the majority of people on Wall Street depend on their bonus to make a living. Their salary is not comparable to other professionals outside of WS...its lower. Take away incentive compensation (i.e. bonus) and its the same thing as asking a waiter to work but receive no tips. While I do agree that the executives of these companies should not receive a bonus if the overall company did not make money the same can not be said for the average employee. An employee who receives a bonus did so because he/she made money for the company...the company does not pay someone a bonus for nothing.

    January 29, 2009 05:18 pm at 5:18 pm |
  17. walleye

    If any of that money goes for bonus, new drapes, planes etc then shame on our Govt for giving it to them without any oversight.

    January 29, 2009 05:18 pm at 5:18 pm |
  18. BB

    Citi tried to raise the interest rate on my credit card (25 years and no missed or late paymets). They said it wasn't personal.

    I told them to cancel my membership. My money is very personal to me. I cut that card up.

    The did this within 2 weeks of receiving a bailout from the gov't. (our tax dollars).

    January 29, 2009 05:20 pm at 5:20 pm |
  19. Bill

    Please Mr. President no more bail out to Banks or Wall Street unless they account for what happen to the 1st $350 billion dollars they received. I agree no more bonus for Wall Street or the Banks. If both can give bonus they do not need the goverment help at all. Please help the homeowners.

    January 29, 2009 05:20 pm at 5:20 pm |
  20. Anonymous

    People are sick and tired of hearing about black this and black that, obama is great because he is black .....enough already

    January 29, 2009 05:20 pm at 5:20 pm |
  21. tired of corporate politics

    Federal Election Commission data says that Citigroup from the article gave Obama over $600,000 and got $45 billion from TARP which Obama supports.

    Sounds like a good return on their investment.

    What do you think of Obama's no lobby money claim now? He just didn't call it "lobby" – it was a PAC.

    January 29, 2009 05:20 pm at 5:20 pm |
  22. Romney2012

    hmmm....I wonder if Obama is quietly blasting his buddy Raines about the bonuses he received from Freddie and Fannie...no wait, he wouldn't do that, because he and Dodd received them as well....it would be nice to see Obama tell the truth.

    January 29, 2009 05:20 pm at 5:20 pm |
  23. Bo

    I am totally OUTRAGED. Wall Street sucks along with all those company stealing from the American taxpayer. UNBELIEVABLE.


    January 29, 2009 05:21 pm at 5:21 pm |
  24. Robert J Sutton

    It's really quite simple. If the government is going to loan 45 billion USD to CitiBank or any other company for that matter, it gets the amount of preferred stock that 45billion will buy at the current price of the stock on the market. If that means that the US government gets a controlling interest in the company, fantastic, that will allow them to dictate how the money is spent instead of crossing their fingers and hoping that obviously corrupt and greedy individuals spend the money properly. Any other company "loaning" that money to another company would get controlling interest. It's time to Nationalize and stop demonizing doing what makes perfect sense. When the time is appropriate, you sell the majority of the stock back to the company at profit to the tax payers, but keep a small portion so that the people will always have a vote on the board. None of this would have been necessary if proper oversight had been instituted instead of repealed. Trusting billionaires to "regulate" themselves, seriously? Give me a break.

    January 29, 2009 05:22 pm at 5:22 pm |
  25. TexasAnnie *-*-*-*-*-*-*-*-*-*-*-*-*-*

    Amen. These guys should only get bonuses when their companies post a positive revenue picture WITHOUT factoring in any bailout monies. That should eliminate just about 100% of them. NO BONUSES!!
    We always learned to live on our annual salary. Any bonus was just that– a bonus. We never relied on it for our living expenses.

    January 29, 2009 05:23 pm at 5:23 pm |
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