10/25/2008 05:12 am ET Updated May 25, 2011

Treasury Secretary Paulson Caves On CEO Pay Limitations

Meanwhile, Treasury Secretary Henry M. Paulson Jr. had agreed to demands from lawmakers in both parties to limit the pay of executives whose companies benefit from the bailout. The enormous pay packages of some Wall Street executives, coupled with the realization among nonwealthy Americans that the crisis could affect their financial foundations, have created an incendiary issue on Capitol Hill.

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

The continuing crisis, already a huge issue in the presidential election campaign, had a more direct effect on Wednesday afternoon, as Senator John McCain, the Republican nominee, announced that he was temporarily suspending his campaign and returning to Washington to deal with the crisis. He also asked Senator Barack Obama, his Democratic opponent, to agree to postpone their first debate, scheduled for Friday night. But Mr. Obama was inclined to go ahead with the debate, his aides said, and was planning to explain his stance late Friday afternoon.

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