Geithner denies White House sidestepping CEO pay limits (updated)

[ProSense]

Geithner denies White House sidestepping CEO pay limits

By Doina Chiacu Doina Chiacu

WASHINGTON (Reuters) – U.S. Treasury Secretary Timothy Geithner denied on Sunday the Obama administration was crafting bailout initiatives to allow companies to evade limits on executive pay and other restrictions imposed by Congress.

"No, that's not true," Geithner said when asked about a report in Saturday's Washington Post that the White House was trying to allow some exceptions.

"Now, our obligation is to apply the laws that Congress just passed on executive compensation and we're going to do that," he told the CBS program "Face the Nation."

"We're also going to make sure that these programs are as effective as possible in making credit more available to businesses and families across the country."

The Post said President Barack Obama's administration believes it can sidestep the rules because it has in many cases decided not to provide federal aid directly to the financial institutions, instead setting up special entities that act as middlemen to channel the funds.

Executive pay restrictions are among efforts by Congress to claw back bonuses and curb pay amid public anger over executive bonuses at insurer American International Group, which has received a bailout worth up to $180 billion.

The "Pay for Performance Act of 2009" was passed by the House of Representatives last week and now goes to the Senate.

Geithner also said the U.S. government would not hesitate to oust management of big banks that require "exceptional assistance," as it did last week with General Motors.

link

Updated to add transcript:

SCHIEFFER: Let me ask you about one more thing. As Will Rogers once said, all I know about this is what I read in the newspapers. But the Washington Post has reported that even after all the outrage about the bonuses at AIG, that the Treasury Department is working out an arrangement now to set up new some sort of entity where they can funnel money to this entity and then it can give the money to these companies and banks that need help. And in doing that, it allows the banks and their executives to evade and go around limits that had been placed on executive compensation by the Congress. Is that right?

GEITHNER: No, that’s not true, Bob. Now, our obligation is to apply the laws that Congress just passed on executive comp, and we’re going to do that.

Now, we’re also going to make sure these programs are as effective as possible in making credit more available to businesses and families across the country. Now, the way the legislative process works is Congress legislates. We have an obligation then to design and put out regulations for applying that. We’ll put those out in draft. The American people have the chance to evaluate those and assess and comment on those. We’re working with Congress as we do this. And -- but again, our obligation is to apply those laws, and we’re going to do that because it is very important to us that every dollar of assistance we provide doesn’t -- goes to expand lending.

SCHIEFFER: But are you saying to me -- and we’ll close with this -- that every limit that Congress has put on executive compensation, that you’re going to see that that’s enforced and that these -- there’s not going to be a way to get around that?

GEITHNER: Absolutely, because we want the American taxpayers -- this is going to generate greater lending, not providing excess compensation.

SCHIEFFER: All right, Mr. Secretary, thank you so much for being with us this morning.

GEITHNER: Thank you very much.

[mucifer]

1. maybe people calling them out on this made them change their policy.

I can hope can't I?

[FrenchieCat]

3. Many people like whom? Wapo and unidentified official sources say?

[Captain_Nemo]

damage control. n/t

[ProSense]

9. Or maybe the WaPo story was BS?

Either way, Geithner's statement is good news.

[mkultra]

16. the story was a load of crap to begin with

complete wild assertion. Your pretty dumb for buying it. don't watch fox news, it will warp your little mind.

[Teaser]

20. FAIL

damage control is what you just tried with that empty post.

tried, but FAILed, of course.

[ananda]

2. Words are not actions.

The proof is in the pudding.

[mkultra]

17. true. fact is they havent done anything wrong.

so the pudding so far is on obama's side.

[Political Heretic]

35. I agree with this.

[Political Tiger]

4. "No, that’s not true."

Unfortunately, in a never ending quest for poutrage, some people are more inclined to believe "anonymous sources" over the direct word of those involved.

Thanks for posting facts!

[mkultra]

11. only those who pre aligned against O would blindly take Wapo over the whitehouse.

[Political Heretic]

32. I agree, which is why I and everyone I know contacted the media and demanded that they

get comment from the White House.

That's why I wrote in my threads that we needed the White House to comment.

Now they have. Do you see me saying, "whatever they're lying!"

No.

I'm tickled pink to have them on the recorded explicitly saying they WILL NOT do an end-run around Congress!

[mkultra]

37. no, what i saw you saying was that the story was true before the WH commented.

[Political Heretic]

38. What you "saw" me saying was this as well:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8322191&mesg_id=8322227

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8322191&mesg_id=8322686

Let me make one thing perfectly clear to you, just so there is no misunderstanding of any kind in the future:


I.
DONT.
TRUST.
FUCKING.
GOVERNMENT.
PERIOD.


The ENTIRE system is too in bed with wall street. I'm fucking thrilled that Obama got elected over that madman McCain. You should have seen the party we had at our house that night. And everyone seems to have a REALLY SHORT FUCKING MEMORY AROUND HERE because I BLITZED DU with Obama support threads during the primaries and during the general election, going to bat with PUMAs and supports of other candidates DAILY.

But when it comes to $$$$$$ and our economy, I don't fucking trust anyone in Washington. No one. None. Nada. And people who do are ignorant and naive.

Which means two things. First of all, it means that when I hear anonymous sources from inside the White House leaking information about their take on what the administration intends to do, rather than assuming that its "lies" I tend to perk up, especially when the consequences, if true are absolutely terrible. (I make ZERO apology for that, none what so ever and I never will.)

But then second, it means I also absolutely want verification. I was asking for verification from the first minute of this story. I was arguing AGAINST people who were blowing off the story and wanting to "let it die" because I think that is RECKLESS AND IRRESPONSIBLE!

What people here are pissed about is that I don't give government the benefit of the doubt. I didn't trust first. I will never do that, not with any fucking administration ever. Period. Never. It as nothing to do with how much or little I "support" a President. I love many of the things that Obama has done, and I'll work just as hard for his next campaign as I did for the fucking first one.

In the meantime, we have one fundamental difference and that is I see it as my duty to get in my governments FACE 24/7, and YOU apparently see it as your duty to sit on the sidelines and wave pom poms.

[mkultra]

43. i would suggest you put as much trust or less in MSM in the future as well

it may save you from looking like a fool again.

[Political Heretic]

45. If this is what looking like a fool is like to you, then I welcome it.

I will always, always latch on to stories with white house sources, anonymous (which is common - no one had a problem with that during the Bush years) or otherwise, that suggests that the Government is circumventing the law in order to do the bidding of business.

Why?

Because in Democratic years or Republican years that is usually how it works. The difference in how I responded now that Obama is in power is that I wanted the White House to comment, and then I can take their on the record comment as true.

If it had been Bush, NOTHING would have convinced me. I would have simply accepted what was reported in the media as the truth, and nothing the Bush White House could have said would make any difference to me. So complete was my belief that the Bush White House were lying sacks of shit.

That's the difference.

You are basically saying I look like a fool for being skeptical about our government not bending over backwards for corporate interests. You're saying its foolish to take serious stories that suggest our government is again doing exactly what we know it has regularly done under BOTH parties watch for decades....

Of course, you ignore me asking if there was a White House response and actually wanting one, you ignore my saying that I was confused and uncertain about what was going on...

Who is the fool again?

Sooner or later you're going to figure out that of all the people you could "target" - targeting me as an example of "Obama haters" is going to make yourself look like an idiot in the long run. I promise you that.

[mkultra]

47. i imagine you have welcomed it many times and repeatedly do so.

i don't really care what you so post facto. I saw your diatribes. there was no balance before. no careful search for truth or insight.

[Political Heretic]

48. You are full of shit.

My so-called "diatribes" are out there freely for anyone to see. I'd invite anyone to take a look and call YOU on your bullshit.

[mkultra]

49. Or they can just wait and see what you type from here on out.

i think they call that "keeping an eye on you"

[Political Heretic]

52. That works for watching me, but not so much for calling you on your bullshit.

But either way, it works for me.

[mkultra]

55. good luck

[Political Heretic]

31. I take Geithner at his word, and I'm thrilled and proud of the WH for the statement!

I know you're right, there are some people who have their minds made up to oppose the President no matter what.

The only thing I have my mind made up about, is that I'm not going to let people hurling insults like "poutrage" and calling me a "hater" and whatever else stop me from being an actively engaged citizen.

Some people are offended because the Post ran a story, going as far as to suggest that its just made up because it uses, as has been common through out the history of reporting on the activites of the white house, "anonymous white house sources."

But I think this is a much better example of how the media should be - the end result was to get the administration to specifically comment. Not only to say generically "there will be accountability" but specifically to say "we will not try to do an end-around congress." To me, thats huge.

It's not about questioning motives. I take the statement at face value. But I'm just extremely glad the administration was put into a position of being forced to answer.

What's funny are the people who look at this as some sort of tit for tat thing. I'm extremely glad prosense posted this updated information and if I had been awake (I work nights) and found it I would have posted it first. I'm also glad that the WaPO story got attention here. I know that I and my friends actually called and wrote to every media source we could think of strongly urging them to pressure the white house for comment and to push deeper and get more sources. I contacted everyone I know via email and via my internet social networks and asked them to do the same.

The result was the white house going on the record - I'm thrilled. I'm proud of the white house, and proud of my friends who pursued the media for an answer.

It's childish to turn this into some sort of us vs. them thing.

[pot luck]

53. My problem with the WaPo article is

that it was trying to stoke up anger at the WH by confusing their readers. They deliberately conflated bailed out companies with those participating in Geitner’s Toxic-asset Plan and insinuated that the WH was trying to prevent Congress from imposing executive pay on bailed out companies.

This article amounted to nothing more than a “When did you stop beating your wife?” accusation. Although the WH has denied the accusation, the notion that the WH is crooked and in the pocket of Wallstreet has been planted into everyone’s head. One needs to look no further than this thread and that in LBN to see examples of this.

[provis99]

5. Fire Geithner! n/t

[Uzybone]

6. Thanks for posting facts

not rumor, spin and innuendo.

[Better Believe It]

7. What facts? A statement was posted.

Congress shall find out if it is true or not.

And perhaps as a result of the media exposure and threat of Congressional investigation the Treasury Sec will pull back from the course they were on.

Let's hear it for transparency!

[ProSense]

8. Maybe they can ask WaPo for the facts. n/t

[mkultra]

12. WaPo didnt have any facts. Just a story and some leading questions.

[mkultra]

18. your the only one without any facts

you didnt have a single shred of evidence did you?

[Teaser]

21. "a statement was posted"

and Better Believe It is quite the expert on posting "statements".

[Spazito]

24. LOL!

too true!

[mvd]

10. K&R

I'm glad they addressed this, even if it is damage control.

[firedupdem]

13. Thank You ProSense! Screw the MSM and Washingtong Post. n/t

[jbnow]

14. This is really bothering me. Schieffer had it wrong although

clearly the Washington post wanted tp give the wrong impression

But the Washington Post has reported that even after all the outrage about the bonuses at AIG, that the Treasury Department is working out an arrangement now to set up new some sort of entity where they can funnel money to this entity and then it can give the money to these companies and banks that need help.

The article specified what programs they wanted to "evade" the law on. It was not for the banks being bailed out or getting help, it was for the banks that were going to offer services to the community (the one for consumer loans, another for small business loans) and also for those willing to buy the bad assets.

The article made it sound wicked using terms like
that spooky language is used
-made notorious during the Enron scandal
-to evade the congressional mandates
-created largely for the separate purpose of getting around legal limits on the Federal Reserve
Getting around the legal limits? Well from the Washington Post article
"The Fed does not ordinarily provide support for the markets that finance credit cards, auto loans and student loans but could channel the funds through a middleman."

Hello, that is what the program is for, consumer loans, and the fed would partly fund this. They don't usually, right, they don't usually need to. The bailed out banks are slow to male the loans (and likely fear lowering their reserve more) and we want the consumers to get them.
Should we jail them for looking for a legal way to use the funds?

The limits were written for bailed out companies. Congress exempted the one other program they knew would be part. They exempted limits on banks that were taking part in the mortgage progream.

If they knew about the other programs then...they'd exempt those banks to.

All bank executives are paid too much and I think it's great that we limit those getting bail outs. But unless we limit the pay for ALL banks what sense does it make to limit the executive pay on banks that cooperate in the other programs to get the money out to us? That sure isn't the way to get volunteers "Take part in our program and cut your pay!"

So I read Geithner's answer and maybe the Post was wrong or maybe it wasn't true, but it makes no sense to me that we will limit the pay of these banks.

That was a nasty article with all the unnamed sources, insinuations and never pointing out something like "While these banks would be using some of the bail out funds they are not receiving help themselves but distributing the funds to small businesses and consumers". OK it was apparent by reading the article but evidently not apparent enough

The article had quotes like this

"They are basically trying to launder the money to avoid complying with the plain language of the law," said David Zaring, a former Justice Department attorney

Calling it laundering money? The Post did their best to make it sound like crimes when it was common sense. They could/should go through congress too (where republicans will filibuster just to be asses) but for the programs to be effective the restrictions have to be lifted for banks not getting bail outs themselves.

They do point out the problem we will have getting any of these programs going in their last paragraph

Some private investors said, for instance, that they would not help the government buy toxic assets from banks if the congressional restrictions were applied to them. And every major provider of small-business loans has said that it will not participate in the government's program if it has to surrender ownership stakes to the government or submit to executive-pay limits.

Great.

[Political Heretic]

33. The WaPost also had specifics: "Three of the five program types"

We have public comment from the White House. That's where it stands. It would be inappropriate of me, I think to not take the administration at its word until given clear reason not to. One thing I have not seen in this administration yet is outright lying. Therefore, I'll trust them. Next we make sure they stay true to their word.

However, people trying to pretend like the WaPo article was a substanceless piece are being dishonest. Maybe some staffer went too far and ended up not speaking for the White House... but the article had details. It wasn't some abstract rumor.

I have to disagree with you about the post trying to make it sound like crimes when it was common sense. Side-stepping congress is a bush-move that is absolutely unacceptable under rule of law - I don't care who does it, and I don't care what the reasons are. That was my major concern.

[mkultra]

39. The Wapo Story was baseless

and had no foundation in fact. It was, essentially, a complete fabrication aside from the push question response from towns. lol, i can hear it now, heres the time line

Wapo: Mr. Towns, how do you feel about this made up shit?
Towns: uh, well, i guess i would investigate
Wapo: <post story with quote>
Heritic: OBAMAZ TEH EVVIL!
whitehouse: No.
Heritic: well, the may still be evil.

[Political Heretic]

44. You are outright lying about what I have said.

What you are saying about the story is that its your conclusion that the white house sources were fake, made up. That's fine, I don't think we should be taking that chance which is why I'm glad that the media pushed to get the WH on the record. Now that they have......

"Heretic: well, they may still be evil."

Bullshit. I have not been saying that. I've been saying myself, and telling other people who ARE actually saying that that we need to take the White House at its word because on the record White House word trumps anyonymous white house sources, and so far I haven't seen the administration ourright lying. So I trust the word of the WH.

Stop lying. It's childish and stupid.

[mkultra]

51. .

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8323306&mesg_id=8324011

[Political Heretic]

54. Yes, thank you for making my point with an example.

How do you get "whatever, they still might be "evil"" out of that?

Responding to someone saying they don't believe Geithner.... I say, you have to take them at their word, since its between their on the record word and the claim of an anonymous source.

Your problem with that is...... what exactly?

[Name removed]

15. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[MarjorieG]

19. A lot easier to accuse, based on nothing, then try to refute, esp w. media wanting controversy and

resurgent GOP.

[mvd]

23. That's why I and others wanted to see more

The way they worded it, Obama was complicit or something. It's a shame to see such major, "liberal" papers actively spreading lies and propaganda. What's going on?

The Philly Inquirer has no progressive columnists in the Sunday edition - while having a couple centrist columnists and a DLC-style editorial board, and people like Kevin Ferris spreading wingnut BS every week.

[mkultra]

40. it was funny to watch the morons freak out about this BS story.

[redqueen]

22. Quick response from the WH.

[pot luck]

25. I knew the article was BS.

They were deliberately conflating the bailed out banks and companies with those who were going to buy the banks' toxic assets. This isn't the first time that the "liberal" media has written lies and innuendo about Democrats and the Obama Administration, and it won't be the last. I just wish some liberals weren't so quick to believe the lies.

[leftofthedial]

26. In a related story,

Dick Cheney denies the bush administration committed war crimes.

[ProSense]

27. Is there a difference between

believing Cheney and believing WaPo?

[leftofthedial]

56. rarely.

[polichick]

29. And Dodd denies, and then admits, doing the bidding of - who was that?

...oh yeah, Geithner.

[Political Heretic]

34. At this stage, you have to take the WH word, since its their word against anyonymous sources word

Hopefully now both the media and alter citizens will be scrutinizing what comes next in this bank bailout to make sure they do what they say.

[mkultra]

41. yes, we will all be vigilant against the obama administration

thanks for preparing us.

[Political Heretic]

46. Hooookay man.

Whatever you say.

[mkultra]

50. stick to that you YOU might do better.

[JTFrog]

58. Is that why you called for everyone to be totally outraged at the anonymous source first?

Interesting approach.

:eyes:

[firedupdem]

28. kick

[Political Heretic]

30. Great news!!! I consider this a job well done for those of us who were paying attention.

I know I for one got on the phone to every media outlet I could think of and demanded that they make this issue a top priority of their coverage.

Whether it was never the administrations intention or whether or not the public scrutiny caused them to do damage control, either way we have the administration on the record.

Now the next step comes in scrutinizing every single money transfer to wall street.

Thank you Prosense for this update - I have been asleep all day because I work nights. I don't know if you post in a "gotcha" way of if you just post the facts as you have them. All I can say is that if I had found it first, I would have posted it.

I won't replay in my other thread with the WaPo article to responses there because I wouldn't try to kick that now that we have this current statement from the White House.

Cheers!

PS:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8322191&mesg_id=8322227

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8322191&mesg_id=8322686

Try not to paint with a broad brush.

[mkultra]

42. lol

[MasonJar]

36. Geithner and Summers and all their Wall Street buddies need to go.

I do not want to pay taxes to save bankers or banks. I have my own bills to pay, and I certainly do not want to pay for bonuses for failures of monumental proportions by avaricious, prevaricating losers, who advertently or inadvertently sent the world to the proverbial cleaners for their own vicious aggrandizement.

[Political Heretic]

57. kick.