Paulson OKs Cutting "Golden Parachutes"

Treasury Secretary Agrees To Sticking Point Involving Executive Pay

(CBS/ AP)  The White House bowed on a major sticking point in the $700 billion financial bailout plan Wednesday, while President Bush Bush warned Americans and lawmakers reluctant to pass a historic financial rescue plan that failing to act fast risks wiping out retirement savings, rising foreclosures, lost jobs, closed business and "a long and painful recession."

"Without immediate action by Congress, American could slip into a financial panic and a distressing scenario would unfold," Bush said in a prime-time address from the White House East Room that he hoped would help rescue his tough-sell bailout package.

Bush also invited rival presidential nominees John McCain and Barack Obama, along with other congressional leaders, to the White House for a Thursday meeting aimed at reaching a bipartisan deal, reports CBS News White House correspondent Mark Knoller. According to an Obama spokesperson, the Democratic presidential nominee has accepted the invitation.

Earlier Wednesday, Treasury Secretary Henry Paulson said he was agreeing to demands from critics in both parties to limit the pay packages of Wall Street executives whose companies would benefit from the proposed bailout.

"The American people are angry about executive compensation and rightfully so," Paulson told the House Financial Services Committee. "We must find a way to address this in the legislation without undermining the effectiveness of the program."

The issue has been a much-debated point in the struggle to win congressional approval of the historic rescue of the financial industry, though the "golden parachute" money involved would be relatively insignificant compared with the huge sums being talked about.

There has been other progress on a potential deal as well, with the Bush administration signing off on greater congressional oversight - meaning the treasury secretary will have to answer for how he spends the bailout dollars, reports CBS News correspondent Bob Orr.

McCain said the Bush administration's plan, as it stands, seemed headed for defeat and a bipartisan solution was urgently needed.

"I do not believe that the plan on the table will pass as it currently stands, and we are running out of time," he said.

Because of that, McCain said he was returning to Washington and was asking Obama to agree to delay their first debate, scheduled for Friday, to deal with the meltdown that has engulfed the political race as well as Congress less than six weeks before Election Day. Obama's spokesman said the two campaigns were working on a joint statement.

"We welcomed McCain's announcement," White House spokesperson Dana Perino told CBS News. "We're focused on a quick, bipartisan solution. They're involvement could help bring this to conclusion."

Obama's campaign said they are prepared to go forward with the debate.

The heart of the unprecedented plan, dramatically unveiled less than a week ago, involves the government buying up sour assets of tottering financial firms to keep them from going under and to stave off a potentially severe recession and the accompanying lost jobs and further home foreclosures.

The crisis is hardly limited to the United States. Federal Reserve Chairman Ben Bernanke, who warned senators on Tuesday that they must act or face recession, was back on Capitol Hill Wednesday saying that global financial markets are under "extraordinary stress."

Lawmakers in both parties have strenuously objected to the plan over the past two days, Republicans complaining about federal intervention in private business and Democrats pressing to tack on help for beleaguered homeowners.

Paulson, who with Bernanke heard hours of withering criticism at a hearing on Tuesday, met for the second day with House Republicans, some of whom have announced their opposition to any federal bailout of the private financial markets that form the backbone of American capitalism.

Other Republicans appear to be more open to legislation, according to congressional and administration officials, although on different terms than the White House has proposed.

One possible element in a final deal may be the government taking equity stakes in the companies it helps as insurance against taxpayer losses, reports Orr.

Still, most majority Democrats and minority Republicans say something must be done - and will be soon.

House Speaker Nancy Pelosi met with administration officials and then told reporters, "We're moving in a productive direction." She declined to discuss specifics.

Amid speculation that votes on any legislation could slip into next week, she said, "We'll finish it when it's ready. I'd rather it be sooner rather than later."

She has insisted Republican lawmakers must stand up for their own president's proposal, but they appear anything but eager to do so.

"It's a tough sell to most of our members," said Rep. Tom Davis, R-Va., after a closed-door meeting with Paulson and Bernanke. "It's a terrible plan, but I haven't heard anything better."

Compounding the administration's challenge, Republicans and Democrats both say Bush has lost credibility, particularly in cases where he argues there will be dire consequences if Congress doesn't act.

"They sold the war, they sold the stimulus package and some other things. It's the 'wolf at the door"' argument, Davis said.

The presidential campaign added yet another layer of complexity.

Some Democrats expressed concern that they would side with the unpopular Bush, only to have Republican candidate McCain oppose the measure and try to ride his opposition to victory over Obama.

So far, neither McCain nor Obama has indicated how he would vote on the measure.

Democrats also want to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure.

Another demand, for provisions that give Congress greater authority over the bailout, have already been accepted in principle.

For their part, some Republicans have called for a suspension of the capital gains tax to free money for investment.

Even some of the supporters of the bailout sounded less than enthusiastic.

"It's not my job to just echo people being mad. I'm going to choose the bad choice over the catastrophic choice," said Sen. Lindsey Graham, R-S.C.

Paulson has been negotiating for days with Democrats over the legislation, and key details, including the limits on "golden parachutes" for departing executives, have not yet been finalized, said Treasury spokeswoman Brookly McLaughlin. She said, "Discussions are ongoing on this and a number of issues."

[nicholasma]

NO! No bailout, I never got the chance to own a 500,000.00 house and bull *** my way to that kind of loan!

Please tell me... 700 b in bad loans this years means what ??? in 4 years their still bad loans !! let then eat there loans. Dot tell me to eat cake!

[auntc3]

Pass the Deal; put a rider on it so you can adjust later.

cut the parachuttes; give them 2 weeks severence like they due to people below them....(you can bet they took their bonuses before reporting problem).

[wardoglrs]

Bailout type Cost to taxpayers (Source: Reuters)
Proposed Treasury Department legislation $700 billion+
Bear Stearns financing $29 billion
Fannie Mae and Freddie Mac nationalization $200 billion
AIG loan and nationalization $85 billion
Federal Housing Administration housing rescue bill $300 billion
Mortgage community grants $4 billion
JPMorgan Chase repayments $87 billion
Loans to banks via Fed''s Term Auction Facility $200 billion
Loans from Depression-era Exchange Stabilization Fund $50 billion
Purchases of mortgage securities by Fannie Mae and Freddie Mac $144 billion
TOTAL $1.8 trillion
COST PER HOUSEHOLD $17,064

Donald Trump yesterday made the very same statement that a wealthy uncle of mine has been making for years. Stop gambling your money away on Wallstreet. I have friends who balk at spending more than $5.00 on lunch each day. Yet they''ll take a $11,000.00 loss in the stock market and blow it off as "oh I''ll get it back." Yeah right. Trump as well as my Uncle believe that any extra money or savings should be invested in Real Estate not stocks.

[armydog2]

hang on everyone, we are in for a long hard ride, friggin thiefs.

[hologram5]

Cut them loose and let them sink. They are the ones who made this mess, let them clean up their own mess.

[mytoosense]

Bush said last night that no money from this bail out package will be used for executive bonuses.

What Bush did not say was, once the bailout puts these companies back in the black, they can''t give themselves a bonus out of their own profits.

[whitemale08]

WE HAVE TO STOP THESE POLITICIANS FROM SAYING YES TO THE DEBT FARMERS!!!!!

NO MORE CULTIVATING AND HARVESTING DEBT FROM THE AMERICAN PEOPLE!!!!!!

GO BACK TO WORK WALL STREET AND GET A REAL JOB!!!!!!

STOP THE DEBT FARMING ONCE AND FOR ALL!!!!

SAY NO TO BAILOUTS!!!!!!

[brianbwb-2009]

Of course Paulson agrees, beggars cannot be choosers. For his cut of %700 big ones, he will sell his daughter to be ground alive into cat food.

It is almost funny, this is the only subject I have seen on these threads where the issue at hand is opposed by all sides.

The only difference is that the Republicans who oppose it will still vote for it, because their party leader is for it.

[Gary Kempf]

Paulson OKs Cutting "Golden Parachutes"

Wow, I know I will sleep much better now that Paulson approves of cutting Golden Parachutes.

Mr. Paulson, DROP DEAD!!!

[egresor]

You are a complete an utter MORON. You can''''t READ.

Seriously - did you ever suffer a severe head injury? You must have brain damage. Maybe part of your visual field isn''''t working, and you just CAN''''T SEE entire sentences.

The stupidity displayed on these boards is reaching DANGEROUS proportions. It''''s really scary to think that such ILLITERATE IDIOTS are going to be VOTING.

Well, by God''''s grace, most of the morons will be voting against McCain anyway. I''''ll be voting against him, too, so by coincidence the stupid will vote the same way as the wise, just for a far stupider reason.

Posted by txgrouch2006===
sorry there but i think your image in the mirror of history and truth is one of those funny mirrors one see''s at the bush circus of errors.

calling me an idiot shows your own mentality sir...not mine.

clinton left some bad things for our economy, but he at least had what the conservatives always espouse. fiscal responsibility compared to the last 8 years he was a better republican than bush.

he did raise taxes on those making 250,000 or more but cut welfare roles and accomplished a very long list.
where are the lists of the conservative''s accomplishments?

there aren''t many.

each one of the republican presidents has left the economy in worse condition than that found it.

present your facts and show me to be a moron... for sticking up for at least a half decent president.

[marcosis78]

Why does Bush want to pass this ASAP? So then it it shows that he "cares" and if it doesnt get approved, then he can blame Congress for not handing him everything under the sun? No wonder he''s the worst president in history. I wonder what the US would be like if Gore''s votes WOULD have been accepted in Florida in 2000.

[rosemari2]

Everybody is supposed to be afraid of this That is all we had ever heard for the last eight years-------be AFRAID-----------I''ve so sick of the scare tactics.

[bthrasher102]

On a lighter note, if you read the 3rd posting on this comment section you will see that someone named factsearcher not only thinks there are 300 million home owners in the U.S. but that giving each of them $1 million dollars would be a cheaper plan than giving wall street 700 billion. DD2302 later states that we should give the $85 billion bailout of AIG to the 200 million adults which according to the posting would be $425,000. I really hope these two people have nothing to do with money or anything really.

[cdfoxtrot3]

Compounding the administration''s challenge, Republicans and Democrats both say Bush has lost credibility, particularly in cases where he argues there will be dire consequences if Congress doesn''t act.

"They sold the war, they sold the stimulus package and some other things. It''s the ''wolf at the door"'' argument, Davis said.


I love it. People - even the dumbest politicians finally "get it" (to paraphrase a former Dept. of Defense Secretary). I never thought we''d see the day that Bush has so little political capital and so little credibility with anyone, that even his own backers have difficulty supporting him.

[pensacola98]

Having a credit-driven economy clearly wasn''t part of the great vision of deregulation.

What has changed today, is that we have fewer savers and more borrowers.

I still feel that President Bush failed to reveal that the prime lending rate discounts were spawned by the inflation worries during the earliest years of the war in Iraq. Had there not been a war in Iraq, the Fed Chairman would have not seen a reason to discount the prime lending rate.

If the citizens want the best guarantee that the bail out bill will work, require a provision that ends the presence of troops in Iraq immediately. We get our economy back and look forward to prosperous times.

[txgrouch2006]

no leg to stand on there!
Posted by egresor at 10:33 PM : Sep 24, 2008

You are a complete an utter MORON. You can''t READ.

Seriously - did you ever suffer a severe head injury? You must have brain damage. Maybe part of your visual field isn''t working, and you just CAN''T SEE entire sentences.

The stupidity displayed on these boards is reaching DANGEROUS proportions. It''s really scary to think that such ILLITERATE IDIOTS are going to be VOTING.

Well, by God''s grace, most of the morons will be voting against McCain anyway. I''ll be voting against him, too, so by coincidence the stupid will vote the same way as the wise, just for a far stupider reason.

[mapjo11]

Hey rhs648 --
I agree totally. We need to insist that members of the House and Senate revamp those perks!!! Hear! Hear!

[rhs648]

Does a federal pension for life after only serving one term in Congress or Senate qualify as a federal golden parachute?

When will that perk come to an end?

Posted by payasyougo

Congressmen know a good thing when they see it. They vote themselves pay increases and perks and it doesn''t matter whether they are Democrats or Republicans. Congress lives by the rule that charity starts at home and there is nothing we can do about it. Congress failed in its oversight duties yet is unaccountable.

[egresor]

starting with Bill Clinton, ... no body is clean in this mess.
Posted by dmw1167 at 09:51 PM : Sep 24, 2008

Oooooh, now you done it. You got the Clintonite cult worshippers after you.

They can blame it on Bush, Reagan, and Nixon. Probably Eisenhower and Lincoln.

But if you blame it on a DEMOCRAT, you better WATCH OUT!

They''''ll make faces and call you names and BAAAAD stuff like all that. LOL!

Clinton''''s involvement in SIGNING the 1999 banking deregulation that led to this mess is like Ted Kennedy''''s involvement in Chappaquiddick. EVERYONE knows he was at the wheel, but they DENY TO THE DEATH that he''''s to blame.


Posted by txgrouch2006
====
clinton sold us out with nafta and trade but what was the condition of the treasury when he left office?
and now after 8 years of extremist conservativism?
no leg to stand on there!