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. Mountain Jeep

    The way I see it, how can you state that "we need to give bonus'es in order to keep good workers"!? That's stupid! The employees should be grateful they have a job. If they don't like the current pay, they can go somewhere else, which, by the way, appears there IS NO OTHER place to go with all the layoffs. I bet some people would LOVE to take over the job for the $$$ they are making now WITHOUT A BONUS! I just got my W-2 and I brought home $16,000.00 last year. I DON'T want to hear anyone making more than that complain. WHINE-WHINE...Poor ole' me. My mother taught me that there's always someone out there worse off. Get over the pay and live within your means people!

    January 29, 2009 06:05 pm at 6:05 pm |
  2. asterisk

    That is disgusting, our tax dollars paying for bonus pay is sick. They get rewared for bad behavior. This has to stop we as citizens cannot bail them out like this and the people suffer. Enough is enough. When does the government say no more money to the banks or corporations that don't care about anyone but themselves and how they can spend more money for senseless items.

    January 29, 2009 06:07 pm at 6:07 pm |
  3. James M.

    Lynn M.,

    But I guess you don't get what a campaign donation is as opposed to a bonus check do you? Last I checked all candidates running for office are allowed to raise funds through donations to finance their campaigns. Obama did absolutely nothing wrong. Rewarding people on Wall Street with a fat bonus check after the widespread disaster is wrong.

    January 29, 2009 06:07 pm at 6:07 pm |
  4. George

    People on this comment board, realize that you have to spend money to make money. Its true, without his advertising campaign, we could have Bush 3 in office. As far as Jobs go, its not going to happen over night, be confident. So quick to judge, Mr. Obama is the best thing for this nation.

    January 29, 2009 06:07 pm at 6:07 pm |
  5. Willy Brown

    How can #44 sit next to that tax law breaker with a straight face?

    January 29, 2009 06:09 pm at 6:09 pm |
  6. Wolfstan, North Carolina

    Most corporations have well-paid board members who make sure the executives get enormous bonuses, stock options, etc., and then the executives reward the boards. It's a mutual admiration and enrichment society. Somehow there's got to be a way to break into this closed circle and inject some reality.

    January 29, 2009 06:09 pm at 6:09 pm |
  7. chuck


    January 29, 2009 06:12 pm at 6:12 pm |
  8. abc

    how come Madoff is still living comfortably at home? to ensure Americans we still have functional & rational governments on all levels, he should be prosecuted.
    first homework for our new administration in rebuilding consumers confidence for the economy and regain citizens trust in government is to investigate all the companies who took a portion of our tax payer money, hard earn money. condemning them isn't enough, President Obama needs to restore our government credential with moral and professional actions. i bestowed my trust in the president by voting him, now, i will give him a year before i blast him. i hope i won't be blasting our president or we're in Depression part 2.

    January 29, 2009 06:12 pm at 6:12 pm |
  9. bea

    American tax payers got played.....

    January 29, 2009 06:13 pm at 6:13 pm |
  10. MS

    In answer to Lynn in NM
    What does that have to do with this story? That is a real partisan comment. Well, one partisan comment deserves another.

    I would like to know the Political Party affiliations of the bonus recipients. I'd be willing to bet that they are your typical Country Club Republicans who are quick to point out the failings of the welfare state, but who, whole-heartedly endorse the corporate welfare state that they are taking advantage of.

    January 29, 2009 06:14 pm at 6:14 pm |
  11. Lyle

    Many of the comments quoted here could easily be applied to Treasury Secretary Tim Geithner, whom, as we know has a history of not paying his taxes. It is “Shameful” to not pay your taxes, it is “outrageous” to not pay your taxes and it is a slap in the face to every honest tax payer because “"Every dime counts, especially when they're taxpayer dimes…”. Timothy Geithner is not to be taken seriously.

    January 29, 2009 06:20 pm at 6:20 pm |
  12. Independent_me

    These CEO crooks should be brought up on charges of grand theft and treason. They should be made to give back the money we gave them, and their Boards of Directors should be thrown in jail for abdicating their fiduciary duties. This madness has got to stop!
    How much is enough for these crooks???
    Black men and poor whites are thrown into prison for long terms for stealing ...why can't they?

    January 29, 2009 06:21 pm at 6:21 pm |
  13. Bolt

    Since Congress and the Executive Branch (both Democrats and Republicans) have as much blood on their hands as does Wall Street for this mess perhaps all members of both houses of Congress should be forced to take a 50% pay cut until the recession has ended and the economy is "making a profit" again. The fat cats in Washington are part and parcel of the same putrid swamp the bankers and Wall St. firms swim in. It seems disingenuous to rail against the corporate and hedge fund monsters while letting the instigators of the mess keep receiving their very generous compensation packages.

    January 29, 2009 06:23 pm at 6:23 pm |
  14. Timing is Everythig

    He sure waited long enough to come out and comment on the bank executive bonuses. That is all we have been hearing about for weeks while he was touting his stimulus plan free of all pork. Now that is a joke on the pork.

    At any rate if it was a rant to get even with SOME legislators who don't want anymore pork, message was received by the stock market. It tanked.

    January 29, 2009 06:23 pm at 6:23 pm |
  15. Rolando in Tampa

    What I want to know is why some people will never give Obama a chance. They will criticize every single thing he does. Their lives can and hopefully will improve over the next four years but still they will never admit it will be because of Obama'a administration. The country gave good ol' "W" was given his chance...and he blew it. We all just didn't wake up hating him one day for no reason. He systematically alienated more and more people. Obama is in his second week in office and already people harbor such a rediculouos and unwarrented amount of hatred for him. Let me ask you this: How has Obama negatively affected your life? Try not to make a fool of yourself while attempting to answer that.

    January 29, 2009 06:23 pm at 6:23 pm |
  16. Albo58

    Didn't Geithner get a seperation package? Did he pay taxes on it?

    January 29, 2009 06:24 pm at 6:24 pm |
  17. Sharon S.

    Good for Obama...

    January 29, 2009 06:26 pm at 6:26 pm |
  18. 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 06:27 pm at 6:27 pm |
  19. Jim

    Well, he should have known. He voted to give him the money. The same will happen with the new stimulus package. If they put limitations on what the money can be spent for they will not get their share in return.

    Give me a 100K stimulus check and I will help out the economy in short order.

    January 29, 2009 06:27 pm at 6:27 pm |
  20. PatB

    I thought bonuses were supposed to be given out based on perfomance!!

    January 29, 2009 06:28 pm at 6:28 pm |
  21. MoJo

    So why aren't there stricter regulations of the use for this money? Where is the accountability....why not stipulate that if you get money you don't get to allocate bonuses? I say, make they pay it back....or take the funds away. My company froze pay increases this year....where is their discretion?

    January 29, 2009 06:33 pm at 6:33 pm |
  22. Marty

    congress should create a 100% tax on bonuses for this year.

    January 29, 2009 06:36 pm at 6:36 pm |
  23. fearful for my country

    Yeah, and the old and the disabled get a big whopping 300.00 bonus. What a joke! Why bother?

    January 29, 2009 06:37 pm at 6:37 pm |
  24. abc

    "we need to give bonus'es in order to keep good workers" hahaha... this is funny. first, your company will not be in this disastrous mess if you have good workers, with this said, bad workers don't deserve a job! there are plenty of great workers, honest ones in our country except they don't play to your CEOs cover-my-mess.

    my question is, do we have enough time to let these banks play out on their own? clean the mess they made (or revealed)? i'm beginning to think our govt. should buy them to figure everything out and then give them to well-deserved investors... argh~

    January 29, 2009 06:37 pm at 6:37 pm |
  25. Jay

    They are called DONATIONS because you choose if you want to give up money for the cause.These people "CHOSE" to contribute money to his campaign( just like every other canidate) it wasnt mandated upon them.What is RIDICULOUS is a company asking for a bailout of 45 MILLION dollars while they are in the works of buying a company jet for 42 MILLION TAX payer dollars. These companies are laughing all the way to the bank while tons of people are struggling to pay mortgages, rent and keep food on thier tables! All I have to say is OBAMA OBAMA OBAMA OBMAMA OBAMA!!!!!!!!!!!

    January 29, 2009 06:38 pm at 6:38 pm |
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