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White House won't endorse Wall St. pay cap

Jan. 30, 2009 at 5:00 PM   |   Comments

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WASHINGTON, Jan. 30 (UPI) -- The White House Friday gave a tepid response to a new U.S. Senate bill that would cap the pay of some Wall Street executives at the same level as the president.

Press Secretary Robert Gibbs told reporters that while President Barack Obama agreed that paying generous bonuses at a time when the financial sector was seeking government assistance was "outrageous," he stopped short of endorsing the measure.

"I think you will see the president and his economic team outline a plan to deal with what he found irresponsible yesterday," Gibbs said.

The salary-cap bill was introduced Friday by Sen. Claire McCaskill, D-Mo., who blasted Wall Street execs as "idiots" who were "kicking sand in the faces of the American taxpayers."

"These people are idiots," McCaskill declared on the Senate floor. "You can't use taxpayer money to pay out $18 billion in bonuses."

Meanwhile, bonuses and salaries found a defender Friday in former New York City Mayor Rudy Giuliani, who pointed out that the entire city benefited when Wall Street was flush.

"That money gets spent. That money goes directly into the economy," Giuliani explained on CNN's "American Morning." "First of all, it gets taxed as income. Secondly, it gets taxes again when somebody buys something with it."

Giuliani said he was concerned that a squeeze on the financial sector's disposable income would result in job losses at the retail and restaurant level.

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