WASHINGTON, Sept 23 (Reuters) - Washington lawmakers must limit executive pay for companies participating in the $700 billion taxpayer bailout of Wall Street or they risk an assault on Congress by furious voters, a senior U.S. Democrat said on Tuesday.
“Taxpayers deserve to be first in line in all of this,” Senate Banking Committee Chairman Christopher Dodd told CNN.
In an interview from the Capitol, the Connecticut Democrat said executive pay limits will be part of the bailout package that lawmakers are rushing to enact at the request of the Treasury Department and Federal Reserve.
Dodd warned that if corporate executives participating in the bailout end up walking away with multimillion dollar compensation packages, “you’ll have people storming this building if we don’t understand that people are fed up with this kind of behavior.”
The financial crisis has become the No. 1 issue in campaigning for the Nov. 4 U.S. presidential election, and with many members of Congress also vying to retain their seats, lawmakers are reluctant to merely rubber stamp the Bush administration’s plan.
Dodd said he was angry as well.
“This did not have to happen. This is not a natural disaster. It was a preventable, avoidable situation. But we are where we are,” he said.
The administration, pushing for quick congressional action, has been resisting demands that executive pay limits be part of the bailout package. Lawmakers said administration officials are worried that the limits could discourage participation.
The Senate Banking Committee plans a hearing on Tuesday on the bailout proposal. In testimony prepared for delivery, Treasury Secretary Henry Paulson said Congress should avoid slowing the bailout package down “with other provisions that are unrelated or don’t have broad support.”
New York Sen. Hillary Clinton also called for controls.
“We cannot give the firms a blank check. We can’t give the Treasury a blank check. Taxpayers need to have some control over the purse strings and not be left holding the bag,” she said on CBS’ Early Show.
She said that, over time, Washington must also do more to address the root cause of the crisis.
Dodd told CNN that the package will include strong oversight and some help for homeowners facing foreclosure. He said it could take a few days for lawmakers to act.
“I’m prepared to act quickly, but I am not going to act irresponsibly in this,” he said. “It needs to be done correctly. If it takes a little longer, so be it.”
Editing by Patricia Zengerle