'This Week' Transcript: Stimulus Debate

STEPHANOPOULOS: That brings me to the next -- I do want to get into the banking and the housing provisions, but there was one more provision in this stimulus package that I want to ask you about, Senator Schumer. At the last minute, a new executive compensation provision was brought in that would cap bonus pay for executives at these financial institutions that have received TARP money at a third of their salary.

Now, the opponents of this, including those in the Obama administration, have a number -- they say it's going to lead to a brain drain, workers are going to go to foreign banks. They say it's going to force the banks to pay back that TARP money before it is the right thing to do. They also say it might have the perverse effect of actually increasing salaries at the banks. So why put this in now?

SCHUMER: Well, first, you know, Wall Street has to get it. And the bottom line is, the average American says, "I go to my desk. I go to my assembly line. I do the right thing. I make no mistakes. And now I'm worried about being laid off. There are declines in pay and benefits. My paycheck stretches less."

And yet it seems that a lot of the people on Wall Street basically messed up and they continue to get high salaries. So they're...

STEPHANOPOULOS: But you don't (inaudible) this is going to backfire?

SCHUMER: No, let me say two things about it. First of all, Senator Dodd put together a provision, and it's a provision that I think is strong and tough, and we need strong and tough. And Wall Street has to learn, if you're going to take money, billions of dollars, you're going to have to limit executive comp.

I disagree with the administration in this sense. I have no problem if companies want to get out of this program and get out of the program quickly, that's their business and that's their right. And I think that's just fine.

But if you're taking federal money, you're going to have to have some limits...

WATERS: They're not going to get out.

SCHUMER: ... on exec comp.

STEPHANOPOULOS: Does any of you disagree? Or is everybody in unanimity on that point?

KING: I look forward to the debate between Chuck Schumer and President Obama on this issue.

(LAUGHTER)

No, I will say, I agree there should have been some caps. I think this went too far, and I think it can be counterproductive.

GRAHAM: Can -- can I -- can I suggest why Chuck is right?

WATERS: The president is going to sign the bill with the provision in it. And you're absolutely right. They (inaudible) this would be a disincentive to talent and that it would be refused on Wall Street. However, they're now saying, you know, they are going to have to live with it. And I'm -- he's going to sign the bill.

GRAHAM: And the reason -- the reason that we're doing things about CEOs, like Chuck has described, is because people were burned on TARP I. And the big loss of this bill is it's not going down well with the public. I think it missed its mark in terms of stimulating the economy. It grew the government more than stimulating the economy. It's going to be hard for us to go back after this bill to ask for more money for housing and banking.

STEPHANOPOULOS: But do you think that's going to be absolutely essential? Secretary Geithner, when you were...

(CROSSTALK)

GRAHAM: Yes.

STEPHANOPOULOS: ... would not say how much more would be needed for the banks.

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