It appears Rep. Barney Frank has a small disagreement with the Obama Administration.
The Obama people have come out against abiding strictly to the restrictions on executive pay imposed by the Stimulus Bill. Although the president agreed that some limits in executive compensation were needed, the caps inserted into the $787 billion Democrat-crafted stimulus Congress passed Friday are too restrictive and could be counterproductive, administration officials said on Sunday’s political talk shows.
The administration worries that excessive limits on executive earning will put American companies at a competitive disadvantage, leading to “brain drain,” where top financial talent leave for foreign banks. Caps also could cause failing banks to reject bailout money.
“He’s announced his own guidelines for how we should restrict that,” said Mr. Axelrod on “Fox News Sunday.” “In some ways, they’re tougher than the ones that the Senate passed…we all have the same goal … we want to do something that’s workable, and we’ll work with [Congress] to get to that point.”
“We think we can strike the right balance,” said White House Press Secretary Robert Gibbs on CBS’ “Face the Nation.” “We look forward to working with Congress as we go forward on all measures of executive compensation, to ensure that there’s not any waste or fraud in this.”
This did not go over well with Congressional leaders, especially Barney Frank, House Financial Services Committee Chairman. “Rewriting the executive-compensation provision is not an option,” Mr. Frank said. “Mr. Gibbs may not like it, but it is going to be enforced. This is not, frankly, the Bush administration, where they’re going to issue a signing statement and refuse to enforce it. They will enforce it.”
It will be interesting how the Obama Administration responds. If you take Obama at his word, he plans to do exactly what Frank was warning him not to do, which is sign an executive statement limiting the extent of the law. Obama and Geithner’s Wall Street allies are very much against the provision. Where Obama ends up should tell us a lot of whether rationality or the voice of the extreme left hold more sway in the Administration.