Tuesday, July 28, 2009

Frank Wants Tougher Rules for Wall Street

With all the hubbub surrounding health care reform, it's easy to forget another important issue floating around Congress these days: financial institutions and the money they pay their executives, and how it directly impacts consumers and the American economy.

Enter Congressman Barney Frank.

Frank (D-Mass.) has drafted legislation that would toughen the administration's new restrictions on Wall Street pay by banning salaries and bonuses that encourage what the government would call "inappropriate risk."

The proposal, which will be discussed Tuesday in the House Financial Services Committee, would give the government more power over how financial executives are rewarded; administration officials have warned that such extravagant compensation in the private sector -- such as recent bonuses for AIG and Goldman Sachs -- were what led to the financial crisis in the first place.

Never mind the fact that AIG and Goldman Sachs, among others, were just bailed out by the federal government earlier this year.

Frank discussed the issue Monday night on The Rachel Maddow Show on MSNBC.

The Obama administration sent Congress legislation earlier this month that would give company shareholders a nonbinding vote on how their executives get paid. Kenneth Feinberg, a lawyer who represented families of 9/11 victims, has been appointed to reject excessive pay plans at companies that received federal bailout money.

AIG? Goldman Sachs? We're looking at you ...

If approved in committee, Frank's proposal could be up for a vote on the House floor by Friday. Frank supports the administration's proposal, even as he's drafted his own measure. He has also called for financial companies to disclose to federal regulators the details of any compensation deemed to be incentive-based.

A package could be finished by September or October, and combined with a bill from the Senate, could be on the President's desk by the end of the year. If this issue seems complicated -- and I'll admit that at first glance, it does -- watch the video clip above. Maddow and Frank have a simple yet informative discussion that should tell everyone just how important this is.

And as an aside? Just watch The Rachel Maddow Show. One of the best cable news shows out there right now.

UPDATE: Though not related to the financial sector, Frank released a letter on Tuesday announcing his unwavering support for a public option when it comes to health care reform.

From the letter:

"I am a strong supporter of single payer, and I do reluctantly accept a full public option as the best we can do. So I am strongly committed to a public option and I will not vote for a bill that does not include a nationwide, genuine public plan. But I do not agree that it has to be available on day one. It is conceivable that to get the votes to get this done, we might have to accept, for example, a six month delay on a public plan going forward. I am not talking now about a trigger, which I greatly oppose, but simply a time delay for reasons that might be put forward either legitimately but politically."

Score another one for the American people. If only we had more Barney Frank's in Washington and fewer guys like Max Baucus. Then we might actually get something done ...

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