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Obama Lashes Out at Wall Street Over Bonuses

January 29, 2009 at 6:00 PM EDT
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President Barack Obama lashed out at Wall Street Thursday over reports that executives collected more than $18 billion in bonuses last year as his economic stimulus package headed to the Senate for review. Kwame Holman reports.
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JIM LEHRER: President Obama took financial leaders to task today. And, fresh from a Democrats-only stimulus victory in the House, he pressed for a bipartisan approach in the Senate.

Congressional correspondent Kwame Holman has our lead story report.

KWAME HOLMAN: President Obama lashed out at Wall Street today over reports that executives collected more than $18 billion in bonuses last year, while some of their companies received billions of dollars in aid from the government.

U.S. PRESIDENT BARACK OBAMA: When I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses — the same amount of bonuses as they gave themselves in 2004 — at a time when most of these institutions were teetering on collapse and they are asking for taxpayers to help sustain them, and when taxpayers find themselves in the difficult position that, if they don’t provide help, that the entire system could come down on top of our heads, that is the height of irresponsibility. It is shameful.

And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint, and show some discipline, and show some sense of responsibility.

The American people understand that we’ve got a big hole that we’ve got to dig ourselves out of, but they don’t like the idea that people are digging a bigger hole even as they’re being asked to fill it up.

And so, you know, we’re going to be having conversations as this process moves forward directly with these folks on Wall Street to underscore that they have to start acting in a more responsible fashion if — if we are to, together, get this economy rolling again.

There will be time for them to make profits, and there will be time for them to get bonuses. Now is not that time. And that’s a message that I intend to send directly to them, I expect Secretary Geithner to send to them.

And, you know, Secretary Geithner already had to pull back one institution that had gone forward with a multimillion-dollar jet plane purchase at the same time as they’re receiving TARP money.

We shouldn’t have to do that, because they should know better. And we will continue to send that message loud and clear.

Jobless rates the highest on record

KWAME HOLMAN: In the background today, more bad news for the economy. Jobless claims jumped to nearly 4.8 million, the highest on record. That was up almost 160,000 from the previous week.

Among the companies shedding jobs, Ford Motor Company, which will cut 1,200 employees from its credit arm. Ford lost nearly $6 billion in the fourth quarter of last year.

Camera-maker Eastman Kodak will lay off up to 4,500 workers after posting a loss of $137 million last quarter.

In another sign of the deepening recession, the Commerce Department reported that durable goods orders fell 2.6 percent last month, worse than economists expected.

Meanwhile, the sale of new single-family homes fell nearly 15 percent in December, the largest decline in more than a decade.

Despite weeks of bad economic news, not a single Republican voted for the stimulus plan approved in the House last night.

REP. NANCY PELOSI, D-Calif., Speaker of the House: On this vote, the yeas are 244, the nays are 188.

KWAME HOLMAN: GOP lawmakers blamed their Democratic counterparts for shutting them out of the process. House Speaker Nancy Pelosi brushed aside that criticism today, saying Republicans had plenty of chances to weigh in on the bill.

REP. NANCY PELOSI: We reached out to the Republicans all along the way, and they know it. And they know it.

They were part of the original bill with the -- some of the tax provisions were their suggestions. They had what they asked for in terms of committee markups. They had the rule on the floor that gave them plenty of opportunity to make change. They just didn't have the ideas that had the support of a majority of the people in the Congress.

Senate to debate plan on Monday

KWAME HOLMAN: On the other side of the Capitol, Minority Whip Jon Kyl implored Senate Democrats to include Republicans in the bill-shaping process.

SEN. JON KYL, R-Ariz.: They can cram down a stimulus package without Republican support, but if that happens, then when, as we believe, in six months or so, when the American people say, "Wait a minute. We're not better off; in fact, we're worse off than we were six months ago. Who was responsible for this and what can be done to fix it?" Republicans then are going to be in the position to say, "We didn't have the input into this that we needed, and that's why it hasn't worked."

The problem is, nobody's a winner, because all of us lose if this package is not successful. So it's a bittersweet thing to say at that point. We'd rather have the input now to make sure that this package works.

KWAME HOLMAN: Some Senate Republicans, such as Oklahoma's Tom Coburn, just want to see a large part of the House bill scrapped.

SEN. TOM COBURN, R-Okla.: This is about spending money we don't have for things we don't need. That's 80 percent of this bill, spending money we don't have for things we don't need that will not stimulate the economy. That's what this bill is about, and that's why you're seeing such a reaction, because, if we're going to spend the money, let's at least make sure that it accomplishes it's purpose. And any of you who have studied this bill recognize that that is not in the works.

KWAME HOLMAN: The Senate will take up the stimulus plan as early as Monday, with a final bill targeted for the president's desk by mid-February.

Meanwhile, Mr. Obama signed his first official bill into law this morning to end pay disparity and give workers more time to bring discrimination lawsuits to court.