Top Execs at Bailout Firms in For Drastic Pay Cuts

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WASHINGTON -- Top executives at seven companies that took huge taxpayer bailouts are now finding Uncle Sam's help comes with a nasty bite.

Treasury's pay czar is demandIng pay cuts of up to 90 percent for 175 of those top execs.

He also wants their stocks and options reduced by half.

The White House has been pushing these cuts for months.

"There will be time for them to make profits, and there will be time for them to get bonuses -- now is not that time," President Barack Obama said in January 2009.

Click play for more on the pay cuts with Tim Phillips of Americans for Prosperity.

Conservative Sen. Richard Shelby, R-Ala., backs Obama on this, saying the taxpayers who put up $300 billion for these seven companies deserve to see some sacrifice from rich execs with their hands out.

"We shouldn't forget about who put the money in there," Shelby said.
 
Those taxpayers love the limits: 71 percent support slashing the big earners' pay.

But others are worried this may be one more case of too much government intrusion into the private sector -- and may even be harmful.
 
"If you wind up having second rate people in your companies because you cant pay them enough, that is presumably going to hurt the rest of us because our economy wont be as dynamic," said Daniel Mitchell, a senior fellow at the Cato Institute.

Business analyst Dan Arnall said, "The fact that a government official is actually setting pay for the highest paid members of some of the larger companies in the financial services industry is really extraordinary."

As for that official demanding the cuts, he knows he's about to become exceedingly unpopular with those whose pay he's going to slash.

"When I issue these packages, I suspect I'll move to Pluto, which will be too close to Earth," said Kenneth Feinberg, Special Master for Executive Compensation under TARP.
 
The execs will even have to come begging to Feinberg for their special perks like fancy country club memberships, limos and luxury private jets.

It's one more blow to the kind of corporate lifestyle that had GM's former CEO boarding a $36 million private plane to beg for billions of bailout dollars here in Washington.

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Paul  Strand

Paul Strand

CBN News Washington Sr. Correspondent

As senior correspondent in CBN's Washington, D.C., bureau, Paul Strand has covered a variety of political and social issues, with an emphasis on defense, justice, and Congress.  Follow Paul on Twitter @PaulStrandCBN and "like" him at Facebook.com/PaulStrandCBN.