March 29th, 2009
11:23 AM ET
14 years ago

Obama: Big bank heads understand need to cut back bonuses

[cnn-photo-caption image= caption="The heads of some of the nation's leading banks spoke with the press Friday at the White House after meeting with President Obama."]

WASHINGTON (CNN) - President Barack Obama said Sunday that the heads of America's largest banks told him they recognize the need to cut back on large bonuses in the wake of massive federal bailouts for the country's troubled financial sector.

But "the proof of the pudding's in the eating," he added during an appearance on CBS's "Face the Nation."

"I expect to see that restraint operate. ... It's very difficult for me as president to call on the American people to make sacrifices to help shore up the financial system if there's no sense of mutual obligation ... and mutual help."

Obama met the heads of the country's largest banks at the White House on Friday.

He said he told them that "for the average single mom who is just barely struggling to pay her mortgage - or medical bills for her kid - who's paying her taxes, who's playing by the rules and then finds out that a taxpayer-assisted firm is paying out multi-million dollar bonuses, that's just not acceptable. Show some restraint ... show that you get that this is a crisis and everybody has to make sacrifices."

Obama added, however, that people need to understand that any nationwide economic recovery will ultimately depend on a recovery on Wall Street as well.

"Now, the flip side is ... we're not going to get this recovery if we don't see a recovery of the financial sector," he said. "And there's no separation between Main Street and Wall Street. We're all in this together. And it's my job to help keep that focus as we move forward."

Filed under: Economy • President Obama • TARP
soundoff (24 Responses)
  1. HEIDI

    Unfortunately all the President can do is ask. the government doesn't control the private sector, but if these CEO's care of their image, the customer base and the employees what they have honored to do will be more than just words.

    March 29, 2009 11:58 am at 11:58 am |
  2. independent wonderer

    as long as the "sacrifce" doesnt include ME spending more money that I dont have, to get the economy going again, I'm all for it..I have already cut my expenses to the I "expect" washington and the RICH to do more than thier part !

    March 29, 2009 12:03 pm at 12:03 pm |
  3. strong

    These big bank heads make me sick.

    They're cutting back on their bonuses only because of these huge outrages from the public. It is only a matter of (short) time before they're back at the trough again.

    March 29, 2009 12:08 pm at 12:08 pm |
  4. barking dogs

    Now that they all have their golden parachutes,it really doesnt matter,does it?

    March 29, 2009 12:13 pm at 12:13 pm |
  5. keith

    that right on the points .and to all the people who want obama to fail remenber this is the worst condition our country is in ever. so if this dont work our country may never recover ever.if he fail ,so let just are just try to work togather to make sure our country recover because we are all in this togather .rep or dem this is not the time to play game because no boby will come out a winner in the end

    March 29, 2009 12:15 pm at 12:15 pm |
  6. Marc T

    I never had a choice not to use AIG. I DO have a choice which bank I will use in the future. They will listen because their success depends on individuals and small businesses using them. Excessive bonuses or pay? We'll just use a different bank.

    March 29, 2009 12:15 pm at 12:15 pm |
  7. china knows how to deal with these Bankers

    violations of trust need to be dealt with harshly, very harshly

    trust is the fabrik of our society and it has been violated

    March 29, 2009 12:15 pm at 12:15 pm |
  8. Scott AZ

    And just when is our Congress going to start making some sacrifices of their own? They still give themselves annual pay raises, they don't pay into Social Security, they draw free heathcare which considering their salaries they can afford to pay for it. Pelosi can give up her Air Force jet and fly commercial like the rest of us peasants. This is just a short list of things that Congress can sacrifice for starters. I'm sure you folks can add to the list.

    March 29, 2009 12:17 pm at 12:17 pm |
  9. Simmy

    Stop crying over spilled milk. Stop beating that dead horse. Move along to your next complaint.....

    March 29, 2009 12:19 pm at 12:19 pm |
  10. Fitz in Texas

    Yes, Mr. Obama, we all understand the need to cut back.

    The problem Sir, is you don't get that concept nor do those folks up there in Washington. Perhaps your weekly expensive parties should come to a stop. That's one way you can cut back and save our tax dollars. With your stimulus and your wasteful spending you are destroying Americans and this country.

    I think every member of Congress that signed that stimulus without reading it should be FIRED! That would be one way to clean up the place since most, if not all, did not read the stimulus before sighing it. UNBELIEVABLE who in their right mind would sign something without reading it first? Oh wait, I know the answer to my own question....GOVERNMENT WOULD!

    "What this country needs are more unemployed politicians".
    -–Edward Langley, Artist (1928-1995)--

    March 29, 2009 12:22 pm at 12:22 pm |
  11. RR

    Yeah, cutting bonuses will solve all the banking problems!

    let bad banks fail!

    March 29, 2009 12:35 pm at 12:35 pm |
  12. Makes U Wonder

    To: Heidi

    The government doesn't have control of the private sector, yet.

    However, this President and several parties of government are working to control everything including the private sector. This is what scares me the most and many Americans are allowing it to happen.

    March 29, 2009 12:54 pm at 12:54 pm |
  13. The black Spider

    Obama is giving more power to this banks. Thsi one thing I disagree with Obama on.
    Soon the bank will dictate everything in the US

    March 29, 2009 12:57 pm at 12:57 pm |

    They understand now only because the entire country is in an uproar! Otherwise these types of things would keep on happening! You can count on it!

    March 29, 2009 01:10 pm at 1:10 pm |
  15. Kathy

    Yes, bonuses need to be cut, but our government needs to do some cutting of their own and stop wasting our money. Let the people spend their own money and this will stimulate the economy.

    March 29, 2009 01:10 pm at 1:10 pm |
  16. James

    It is time to see Congress do some sacrificing. How about they give up a years salary. Most of them are rich enough. Their salary can go to fund Healthcare that the Dems want so badly. Stop adding to the Federal Budget before the defecit gets so large we are a bankrupt nation
    If Obama was so concerned about AIG can he name one of the Exec's to his finance team?
    I am afraid the Dems are leading us down the path to Socialism!
    Big government is not a good thing.

    March 29, 2009 01:22 pm at 1:22 pm |
  17. The real truth

    I work for Wells Fargo (though I cannot speak for the company), a company that profited last year in the billioins. I'll tell you that last year, my division (home equity) did NOT pay our our bonuses and we are pee-ons. Even our executive did not get his and this happened LONG before any mention of TARP. We do not do subprime...out only thorn was working with brokers.

    One more thing I'd like to point out to the bloggers. Well last quarter WF paid 133 MILLION in INTEREST on that 25 billion we were forced to take. Last quaster we lent out well over 100 billion in loans. Our company is responsible and sound. Mr. Obama...get out of our bank!

    March 29, 2009 01:42 pm at 1:42 pm |
  18. Peter E

    It's political show, nothing else. We squable over $165 million in bonuses for AIG executives while having already paid the bank $170 Billion in taxpayer money. So politicians score points by showing their fiscal restraint over less than one tenth of one percent of the money? Lucky for them the public is mathematically challenged.

    March 29, 2009 01:52 pm at 1:52 pm |
  19. ran

    A new day is coming and maybe we all will be the better for it when compenstion is spread across the work force and not retained by a selected few as is now. Good for us all and about time.

    March 29, 2009 01:58 pm at 1:58 pm |
  20. ex-obama supporter

    sure they know it. but, will they do it? probably not unless they are forced to, through regulations, that the president appears reluctant to enact, for fear of making enemies in high places.

    March 29, 2009 02:24 pm at 2:24 pm |
  21. garson

    Obama and his congress should give back the pay increases they gave themselves: self-righteous.

    March 29, 2009 03:04 pm at 3:04 pm |
  22. tyree

    Listen... Without banks we wouldnt have any way to allocate money and make loans. We need these people. They employ a huge amount of people and more than likely they own your mortage. We cannot allow these big institutions to fail. Go and study the Great Depression. One of the reasons it was so dep and so far reaching was our failure to save the banks.

    March 29, 2009 03:36 pm at 3:36 pm |
  23. Joe Fattal

    General speaking I hate to see a bank refuse me a loan. But I don't mind if some of them takes bonuses. The usualy don't give bonuses to their employees unless they deserve it.

    March 29, 2009 03:47 pm at 3:47 pm |
  24. Texas Teacher

    I think after the uproar over Wall Street bailout... they better have learned their lesson from afar... 🙂 I hope it works... I think we need to give the Obama administration a chance before they are crucified on the white house lawn... I know that is the Repub way of doing politics when not in office, but.... Obama has only been in office a little over 2 months... give him a break already! Bush was surely given a break every way he so stupidly turned! The Repubs lost... just walk on by them the same way they did you, Dems... and let Obama run the Country!

    March 29, 2009 04:04 pm at 4:04 pm |