WASHINGTON (CNN) — President Barack Obama called the prospect that some of the $700 billion Wall Street bailout could end up paying for bonuses to managers of struggling financial institutions "shameful" Thursday.
New York's state comptroller raised that prospect in a Wednesday report that found the bonus pool for the financial industry is still the sixth-biggest on record despite a 44 percent decline from 2007. Speaking after a meeting with his top economic advisers, Obama said it was the "height of irresponsibility" for executives to pay bonuses when their companies are asking for help from Washington.
"The American people understand 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," he said.
"There will be time for them to make profits, and there will be time for them to get bonuses. Now is not that time," Obama added.
The president's latest concerns come two days after struggling banking giant Citigroup — which has taken about $45 billion from the government's Troubled Asset Relief Program — reversed plans to accept delivery of a new $42 million corporate jet under Treasury Department prodding.
"We shouldn't have to do that, because they should know better — and we will continue to send that message loud and clear," Obama said.
The bailout program restricted bonuses for top executives of firms that received federal funds. But New York Comptroller Thomas DiNapoli's report Wednesday noted that the program does not limit bonuses for lower-level staff.
"There needs to be greater transparency and accountability in the use of these funds," DiNapoli said in a statement accompanying his report. "Every dime counts, especially when they're taxpayer dimes, and taxpayers ought to know if
these funds were used to buy corporate jets, pay dividends or bonuses."
White House spokesman Robert Gibbs said the president had a one-word response to DiNapoli's report: "Outrageous." Asked whether the administration
could take any action to head off those bonuses, Gibbs said, "That's what we're
looking into, and that's what we're working on recommendations for."
Obama's remarks came after a meeting with Vice President Joe Biden, Treasury Secretary Tim Geithner and other members of his economic team.
-Now all we need is more accountability on the government's side and more regulation in Wall Street/ banks and other entities.