Claire McCaskill Lays Down Law On CEO Compensation

Sen. Claire McCaskill has delivered a sharp threat to the wallets of corporate executives who took large compensation packages even as their companies accepted government bailout funds. Things, she warned, are going to change.

"I've been mad for a while," said the Missouri Democrat. "When we passed the initial half of the TARP money, [there were] rumors about bonuses, the fact that too many of these guys were holding onto the jobs even though they were running these companies into the ground. Reality didn't seem to be the order of the day."

So McCaskill took to the Senate floor on Friday to put an end to the surrealism. In a bill that came to the surprise of reporters, her colleagues, and the White House alike -- there was no coordination with the Obama administration, she said -- the Missouri Democrat called for compensation for employees of bailout recipients to be capped at $400,000 a year.

"They don't get it," McCaskill said on the floor. "These people are idiots. You can't use taxpayer money to pay out $18-billion in bonuses... What planet are these people on?"

In an interview with the Huffington Post, however, McCaskill didn't just take on corporate CEOs. She criticized some of the spending in the House stimulus package, saying that her fellow Democrats had been "over-anxious."

"Whether it is the National Endowment of the Arts or some of the STD funding or contraceptive funding, all we did was just tee up ammunition for the other side to tear this thing down," she said. "And I would like to think we are smarter than that. I'm hopeful on the Senate side we will be smarter than that."

McCaskill chalked up the mistakes to Democrats only just getting comfortable to life without a Republican president. "There has been such a starvation diet for some of these programs that the appropriators got a little over-anxious in the House. They probably did some things they shouldn't have."

McCaskill also made news predicting that "a few" Republican senators would support the Employee Free Choice Act, a labor community priority that has engendered heated debate between the two political parties. And she called on leadership in her party to vote on the legislation -- which would allow unions to organize more easily -- "sooner rather than later."

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Below is a write up of the interview, edited in some parts to read more smoothly.

QUESTION: Tell me how you came about introducing this bill.

MCCASKILL: I've been mad for a while, when first there was talk -- even within weeks of when we passed the initial half of the TARP money, [there were] rumors about bonuses, the fact that too many of these guys were holding unto the jobs even though they were running these companies into the ground. Reality didn't seem to be the order of the day. This culture, this idea, that these guys are entitled not just to their jobs but to excessive compensation, even when their companies were in moments of extinction because of the decisions they had made, just seemed unreal to me.

Looking back, shouldn't legislation like this have been attached to the first installment of the Troubled Asset Relief Program?

Absolutely. Looking back, I just think none of us really comprehended that this culture was so calcified of entitled that multi-million dollar salaries are due, regardless of whether or not they perform. When all this started piling up - and I was having a conversation with someone this morning - and they said: 'None of them should make more than the president.' And he was right. None of them should be making more than the president. So I walked down the hallway and said draft it and we went to the floor and introduced it today.

[snip]

I think this at least sends the signal that the party is drawing to a close. If you take this bill along with some of the other things my other colleagues are doing, Sheldon Whitehouse is focusing on $40 billion of deferred compensation that is still on the books for these guys and these companies. That needs to be wiped out.

How closely did you coordinate with the president on this bill?

I have not talked to the president specifically about it. Obviously I would like them to embrace this concept and notion. It was the White House who got them to stop buying the jet. I think the president had a very genuine moment yesterday when he lashed out at these executives in regards to the bonuses being paid under these circumstances.... So, I think he is as insulted on behalf of the taxpayers as I am. Whether he chooses to embrace this vehicle or he [gives responsibility] to someone in terms of the authority of the Secretary of the Treasury, I'm not sure.

You are tackling the income disparity issue from one end. How about the other? What kind of labor priorities should Congress consider and where does the Employee Free Choice Act stand on the congressional schedule?

I asked yesterday a member of leadership: 'How soon are we going to get [EFCA] up [for a vote]?' I think there is a growing sense that we need to get it up on the calendar sooner rather than later. But leadership hasn't said clearly when they are going to bring it up. I think there is just as much support for it on our side as there has always been. And I think there are a few members on the other side who would be supportive. So I think it has got a really decent chance of passing. It is obviously something that a lot of us think is important in terms of reinvigorating the middle class.

Care to name some of those Republicans who might cross over?

I don't want to commit to where anyone is because it would tip people off and the business community would descend on them like locust. So I would rather do it quietly, under the fold, without outing them.

On a broader level of restructuring the economy, the stimulus bill passed the House a few days ago without any Republican support. The president obviously reached out in an effort to compromise, but then you had people like Eric Cantor accusing the White House of partisanship. What happened here?

I think that there have been some mistakes made. From my perspective there have been mistakes made on the stimulus bill. There has been such a starvation diet for some of these programs that the appropriators got a little over anxious in the House. They probably did some things they shouldn't have...

We do need to look at the safety net side of the stimulus bill that can get into the economy quickly. But we can't right every wrong in terms of programs we support in the stimulus bill. And the other thing is, whether it is the National Endowment of the Arts or some of the STD funding or contraceptive funding, all we did was just tee up ammunition for the other side to tear this thing down. And I would like to think we are smarter than that. I'm hopeful on the Senate side we will be smarter than that.

We will pull some of this stuff out that is not stimulative and we will have safety net in there that will get into the economy quickly, because that is what these tax breaks do, and the unemployment insurance benefits and the food stamps. People need them and they'll spend it, and it will go into the economy quickly. But I think we have to remain very focused on how we are creating jobs in this thing. And I am hoping we will find that middle ground.

Comments

[blaster8]

Kudos to Senator McCaskill for bringing up something that desperately needs to be discussed in this nation - the vast pay discrepancy between the top and bottom of our workforce. I don't care which sector we are talking about, whether it's the auto sector or Wall St., the fact that the top income 1% earn OVER 400% more than the bottom HALF of society is simply immoral. In the 80's when Reaganomics ruled the land, the margin between the top 1% and bottom half was closer to 30%. Didn't any of these people learn business ethics in school?

[Chopin]

If you identify it narrowly as mere problem of inicome distritubion, you'd have hardtime understanding any of this craziness of scandalous income extremes and disparities. You'd have heck of atime prescribing equitable, workable solutions to address narrowly defined problem of income disparities. If you consider larger phenomenon of typical cycle of wealth creation and distribution in growing and maturing enterprise, community or nation, you'd understand much better context and solutions to problems.

In MBA classes to study industry's model of growth, maturation, and decay, many follow typical cycle of rapid dynamic growth, followed by slower planned growth, then even slower stabilized rational or declining matured growth, finally no growth, decay, demise and disintegration. It applies to businesses, communities, nations and empires.

Consider analogy of new gold rush. First arrive miners who mine and create real tangible wealth. Then come secondwave of toolmakers and serviceproviders -- stores, banks, laundries and brothels. They spread wealth. Then come thirdwave of speculators -- on land, titles, mortgages, financial debt derivatives. They're parasitic locusts. They speculate but create no real wealth. Speculative "bubble economy" eventually goes bust. Then comes the gravediggers, morticians, regulators, and congresspeople to oversee demise and bailouts.

Income disparities between segments and classes of society naturally increase, as real wealth is transferred from one segment and class to another. Inshort, relative income distribution is inherent in growth cycle. Ultimate solution is not to forcibly even it out, but to RECREATE another new cycle of dynamic growth -- another new generation, enterprise, industry,

[Chopin]

In this context of recreating new cycles of wealth generation, President Obama's program agenda for the government to massively invest in creating an entirely new "green energy" infrastructure and its natural outcome of job creation and wealth generation will make PERFECT SENSE. You cannot beat a dead horse of an artificially inflated "bubble economy" that is now busted and in a downward spiral on its way out. You cannot and you won't want to put back together humpty-dumpty. It won't create new wealth. It won't even get consensus in congress to arrive at any equitable income distribution.

The old obsolete 20th economy is dead and on its way out. The rational and wise way to face the future with open eyes, open minds and open hearts is to boldly embrace change to CREATE A 21ST CENTURY NEW ECONOMY BASED ON NEW CONCEPTS, NEW RULES, AND NEW DYNAMISM !!!

[claylandg]

She is a freak!!!!
Socialist world!!!
Is she carzy??
Take a moment in the job that you are in right now would you like someone to tell you that you can no longer get raises because you are at the limit that the goverment allows??
NOT ME!!!
If goverment goes down this road it won't just be compaines thast need bailout money and to me this could be scary!!
Maybe if goverment caps all salaries of all worker, senators, congressman etc and see how they like it before the want to cap bailout compaines.­Government got us into this mess they should lead, they work for us remember??­?????!!!!!

[Chopin]

Part 1 of 2:


All about "Getting MAD":

"I don't have to tell you things are bad. Everybody knows things are bad.
It's a depression. Everybody's out of work, or scared of losing their job.
The dollar buys a nickel's worth. Banks are going bust.
Shopkeepers keep guns under the counter.
Punks are running wild in the street.
There's nobody anywhere that seems to know what to do,
and there's no end to it.

We know, the air is unfit to breathe, and our food is unfit to eat.
We sit watching our TV's while some newscaster tells us
that today we had 15 homicides and 63 violent crimes
as if that's the way it's supposed to BE!
We know things are bad -- worse than bad. They're CRAZY.
It's like everything everywhere is going crazy, so we don't go out anymore.
We sit in the house, and slowly the world we're living in is getting smaller,
and all we say is, "Please. At least leave us alone in our living rooms.
Let me have my toaster, my TV, my steel-belted radials,
and I won't say anything. Just leave us alone."

Well, I'm not gonna leave you alone.

[Chopin]

Part2of2:

"Iwant'you toget MAD!
Idon't want'you toprotest.
Idon't want'you toriot.
Idon't want'you towrite to your congressman,
'cause Idon't know whatto tellyou towrite.
Idon't know what todo about the depression, and inflation,
and [BinLadens], and crime inthe streets.
All Iknow is first you've gotto get MAD!

You've gotto say,
"I'm a HUMAN BEING, GODDAMMIT!
My life has VALUE!

So, Iwant youto getup now.
Iwant allofyouto getup outof your chairs.
Iwant youto getup now, and goto the [internet] Window,
openit, and stick your headout and yell,
"I'M MAD AS HELL, AND I'M NOT GONNA TAKE THIS ANYMORE!

Iwant youto getup right now.
Getup! Goto your [internet] Windows.
Open them, and stick your heads out and yell,
"I'M MAD AS HELL, AND I'M NOT GONNA TAKE THIS ANYMORE!"

Things have gotto change. But first you've gotto get MAD! and say,
"I'M MAD AS HELL, AND I'M NOT GONNA TAKE THIS ANYMORE!"
Then we'll figure out whatto do about the depression,
and the inflation, and the [bank] crisis.

But first, getup! Getup outof your chairs.
Stick your heads outof the Windows and yell,
'I'M MAD AS HELL, AND I'M NOT GONNA TAKE THIS ANYMORE!"
Just getup outof your chairs and goto the Windows,
and yell and keep yelling,

"I'M MAD AS HELL, AND I'M NOT GONNA TAKE THIS ANYMORE!



http://www.youtube.com/results?search_type=&search_query=I%27m+mad+as+hell+and+I%27m+not+going+to+take+it+anymore&aq=-1&oq=

http://www.senate.gov/general/contact_information/senators_cfm.cfm?OrderBy=state&Sort=ASC

[2sunny]

Thank-you for your WRITing.......for your THINKing......aha! A 2009 Demosthenes.
I hear you and the entire masses hear you. I am MAD & APPALLED for what my country has done in my name these past 8 years. And in my small segment of this nation, I have awakend.

[Logic547]

I sure wish Claire McCaskill would have the same amount of passion for what’s in her own backyard.

Year after year our government spends more than they take in, and they are about to do it again to the tune of almost a trillion dollars. Why do we accept this?

If most business people ran their businesses the way our government is run, they would be bankrupt and probably in jail. So if anyone needs to “be thrown in the brig” it’s the people running our country.

When I was a child and asked for something, my mother used to say “and where do you think I am going to get the money to pay for that? The money tree in the backyard?”

I have news for everyone. There is no money tree. So while we can be outraged by the $18 billion in bonuses, we should be careful, as this is exactly what our government wants. Then, we don’t point the finger at them………

[anonimost]

they are not idiots, they just know they can get away with it. honestly, who is going to stop them? who?

[provgrays]

These people aren't idiots.

These people are thieves.

[vicco]

73 pages of comments and nobody in this country is marching,d­emonstrati­ng or even speaking publicly about the outrage of these bums with their hands out looking for free lunch and then stealing as much as they can. Where is all this fear coming from?

[welliecat]

Would you mind organizing one? Nothing is more powerful than showing your conviction through action! yes?

[Lemon722]

President Obama had the words right but now needs to enforce the sentiment McCaskill voiced. Working in corporate America I've never worked for a company that rewarded EVERYONE in the company only the higher level. 20 years ago the rule was if the company made money a certain percentage was due to the management and they had to give written and oral arguments why they were owed a portion of th pie. The grousing happened if the company bought another company and the profits were (on paper) down because that directly affected the bonus numbers. After Reagan things changed and business believed just by breathing they were owed a bonus -- still only the top level but good or bad year, brilliant business person or hack playing solitare during company hours everyone got a bonus. It was still called a bonus but was considered an entitlement. Now the excuse is -- we have to keep these people so we are paying them 'retention" fees -- let 'em walk -- who would hire someone that helped bankrupt a company. Perhaps if they didn't get their "bonuses" they would have to scale back their vacations, luxury items, etc. and have an appreciation for working well to get compensated. Not until this corporate mentality changes will our economy shift and it's high time that happened.

[pamperk]

At last - a voice of reason in the abyss of reason and logic about helping companies who cannot seem to help themselves. Why are the US tax payers paying millions and billions in bonuses to these out-of-touch egotistical corporate heads? With unemployment so high- we ought to be able to find plenty of qualified managers who can do a better job managing these behemoth corporations for $400k per year!! Go Claire!!

[Pip1860]

This news about the bonuses is just the tip of the iceberg. These people will not give a s*it if everyone in this country is dying of starvation.

[Michael Briggs]

Wow! Claire McCaskill is one classy lady! I could definitely see her residing in the White House!

[Nancyok]

I meant 18 Billion, not 18 Million.
And contraception, while I agree this bill is an odd place for it....saves the tax payers billions in unwanted pregnancies in disadvantaged communities. Do the math, $10 in condoms could save taxpayers a life time of medicaid bills, entitlement programs, etc. Preventing unwanted pregnancies amongst society's poorest members is a bargain.

But again, the Arts....for the 18 Billion in bank bonuses, you could save the jobs of about 40-50,000 people who make their living in the Arts.

[camper320]

I agree on both counts. Contraception education is important to prevent the spread pregnancies among minors who are not yet intellectually or emotionally developed or financially capable of caring for children, and to prevent the spread of HIV as well.

Culture is one of our top exports. Can you imagine NYC without artists? Feeding the imagination of emerging and developing artists is necessary to sustain that culture.

[mcartri]

Obama/McCaskill 2012: Put that in your Rapture and smoke it, Sarah.

[welliecat]

I'll vote that ticket for sure!

If not for the need to mollify Hillary supporters by not selecting another woman, Claire should have been on the 2008 ticket. She's capable, she has courage and a straightforwardness and adult temperament which is much, much needed in DC.

Then Biden could have been the SecState and HRC the AttyGen. Oh well.....

[SurrealPumpkin]

McCaskill 2016

[Nancyok]

This is great, but why take a swipe at the NEA or contraception funding. Exec bonuses costing 18Million to a handful of individuals is criminal. But The National Endowment for the Arts provides grants to performing arts organizations and largely to emerging performing artists for performing in schools or outreach to troubled communities. The grants keep performing arts houses open and that keeps jobs in an industry that is in a death spiral from losing corporate sponsorships...and these grants make the difference in small/medium sized communities to be exposed to new arts and ideas...that they otherwise couldn't afford. The artists that get WORK because of these grants...90% of them live on less than $22,000 a year. The centers will be able to keep employees making an average of $40,000. The $50 Million for the NEA could save the livelihoods of 1500 people in the Arts businesses, vs. paying for a handful of rich bankers. That's 1500 people that will be able to pay their mortgages or rent, buy strings and instruments, food, utilities.

[SurrealPumpkin]

Practical reasons. We have time to push through funding for NEA and contraception. The Stimulus needs to get through and every $ needs to work overtime creating jobs.

Money put into a building project doesn't just hire the workers, it also pays tools, machinery, and supplies all of which are made by people who get paid because of the building project.

NEA just doesn't have that kind of bang for the buck.

[camper320]

NEA funding is about 200m/year. It's peanuts compared to infrastructure and building projects. The new subway line in NYC is estimated at 4.3 billion, for phase 1. We're talking apples and oranges.

NEA funding supports developing, emerging and established artists. If you cut that off, you make it harder for people to make it as artists and to come up through the ranks in this country or to just make a difference in their community, which is a mistake because our culture is our biggest export.

[xjustice]

Lets outsource these Sobs, CNBC thinks the EXs are worth every penny. God help us because no one else will. Our men and women are dieing in desired war and now people will have to eat poison peanut dog food. China will execute those EXEs that posioned their milk.

[cavegal]

The best way to outsource CNBC jobs is to stop watching them. Stop going to their websites. No advertising bucks means they go down and some enterprising entrepreneur will buy their broadcasting license.

[Chopin]

But it might fall into Rupert Murdoch's clutch! Congress should re-impose free airwaves media control and regulation, and bust up anti-trust media concentration in monopolistic corporate hands. As part of a comprehensive progressive package to infuse public service and public interests into media networks, Congress can mandate regulated free airtime for ALL federal political campaigns. That'll fix a lot of fundamental ills plaguing the American electoral and media systems.