Obama pushes to limit federal spending on corporate executive pay

[ProSense]

Obama pushes to limit federal spending on corporate executive pay

by Laura Clawson

The federal government is paying a whole bunch of corporate executives' salaries, up to $763,000 a year and soon to be as much as $950,000 a year. President Obama is—again—calling on Congress to limit that to $400,000 a year, the amount the president himself is paid. Think about it: Exorbitant executive pay is being included in what the government pays contractors. Meanwhile, there are 2 million workers at federal contractors being paid poverty wages.

The president's proposal to cap federal payments for executives to $400,000 is not going to strangle any companies or leave any executives in the poorhouse. The Office of Management and Budget's Joe Jordan explains that:

Importantly, the proposal provides for an exemption to the cap if, and only if, an agency determines such additional payment is necessary to ensure it has access to the specialized skills required to support mission requirements, such as for certain key scientists or engineers. And to be clear, nothing in the proposal limits the amount contractors pay their executives. The cap only limits how much the government will reimburse the contractors for the services of those executives. Taking these steps has the potential to save taxpayers hundreds of millions of dollars over what they would have to pay if the cap remains unchanged.

Got that? Federal contractors can pay their executives whatever they want, the federal government just wouldn't directly reimburse them for it. Isn't that, uh, capitalism? But the president of the Professional Services Council, a trade association for government contractors, objects, because:

He argued that many government contractors do business solely with the federal government and would lose their profit margins if they had to pay top executives at market rates without reimbursement.

Hey, if you've restricted yourself to one client and this is what that client is willing to pay, you have some choices: accept that cut to profit margins, have your executives take the pay rate your one client is offering, or get more clients. The idea that we shouldn't be talking about the federal government "only" paying $400,000 of the salaries of executives at private companies rather than forcing them to make those choices just boggles the mind. Yet considering the broken Senate and Republican House, it probably won't too long before the government is paying well over $1 million in salary for these executives.

http://www.dailykos.com/story/2013/05/31/1212805/-Obama-pushes-to-limit-federal-spending-on-corporate-executive-pay

The government is paying the salaries of executives who contract with the government, and Congress is voting to cut food stamps? WTF?

[MotherPetrie]

1. Quick! Look over there! Obama is calling on Congress to do something

Populist that Obama KNOWS they won't do, and Obama's 1% pals knows they won't do, wink wink, but it's worth using to try to distract the restless liberals with.

[ProSense]

2. You want the payments to continue? n/t

[MotherPetrie]

5. Oh please. nt.

[ProSense]

6. "Please" what? Do you support the payments or not? n/t

[MotherPetrie]

8. Knock yourself out.

[ProSense]

3. Maybe, this is one of those times

people can Stand With Obama (like Stand With Rand)?

[MotherPetrie]

7. Why bother? You stand with Obama, you get the rug pulled out from under you. This is

Simply a PR gesture that Obama forgot about as soon as he issued.

[ProSense]

9. Yeah, better to Stand With Rand

He's principled and better for the country as a whole, right?

[riqster]

29. So you're saying "Fuck the Prexy, even when he does something we like"?

Hardly gives the man an incentive to act in a more progressive manner, now, does it?

If you crap on somebody 24/7/365, they can hardly be blamed for tuning you out.

[MotherPetrie]

31. I am saying he is throwing a meaningless sop to the gullible.

[riqster]

32. Pretty much the same thing

Plus an added insult to those who do not agree with you. Not a good way to win friends and influence people.

[1StrongBlackMan]

50. LOL ...

“President Obama is in the pocket of the 1% because he proposed something that he knows the 1% won’t go for, just to ‘look’ populist.”

Gotcha!

And, you believe that …

But absolutely reject that President Obama’s offering the Chained CPI … something he knew, neither the people, nor the congress would/will never go for … was a ploy to expose gop obstructionism.

Really Gotcha … Damned if you do, Damned if you don’t; then, Don’t give a damn about those damning you!

[dkf]

4. Sounds like they are overpaying for the service. Maybe they should put the contract out for bid?

Other than that government has no business dictating salaries. Besides if you add all the perks the President receives much more than $400,000.

[badtoworse]

10. Exactly right. Low bid is low bid.

[ProSense]

11. "Other than that government has no business dictating salaries"

Better idea: Government has no business paying executive salaries.

[dkf]

12. Then government hires all workers directly.

No government contracts only government employees.

[ProSense]

15. I like it.

"No government contracts only government employees. "

I mean, if business can only survive if the Government pays the executives' salaries, then Government should dictate the salaries or the company shouldn't be in business.

Sort of destroys the Republican/RW talking point of last year.

Elizabeth Warren: We built it together (smacks down Chris Christie)
http://www.democraticunderground.com/10021227075

They Blocked that!

by jamess

When it comes to the GOP -- they didn't Build that.

Most times They Blocked that ...







- more -

http://www.dailykos.com/story/2012/08/30/1126128/-They-Blocked-that

[dkf]

17. Government computer companies...wow I would love one of those computers, NOT.

[ProSense]

18. You don't have a point do you?

If companies expect the Government to pay their executives, Government should have a say in the compensation. Period.

[dkf]

20. When you pay for a product do you expect to have a say in the salaries of all involved?

The government is paying for a good as a consumer. Their decision is who do they award the bid to, not the pay structure of the firm they choose. Why stop at salaries? Dictate hours, vacation, pensions, health plans, race and gender quotas and on and on and on.

Since the government purchases something from so many do they get to dictate it all?

[ProSense]

21. Wait

"When you pay for a product do you expect to have a say in the salaries of all involved?"

...do I pay the full executive salary when I buy something? If I did, they'd get zero.

"Why stop at salaries? Dictate hours, vacation, pensions, health plans, race and gender quotas and on and on and on. "

Good idea. Of course, the alternative is capping or eliminating what the government pays in executive salaries.

[dkf]

25. And they would cap that pay if those were government employees.

But the government doesn't want that responsibility. They want to be able to change contractors and leave this crew high and dry.

[ProSense]

30. And they should cap it.

What's your point?

Let them go make a killing in the "free market" and stop being "freeloaders"

The greedy capitalist bastards want the government to cap and keep low everything (Medicare, minimum wage, food stamps, unemployment benefits) except their excessive compensation.

[JDPriestly]

40. You mean just like other employers in the free market?

That's what employers have been doing to American workers since at least the late 1970s. It's called the art of takeovers. It's called at-will employment. It is the reality of the American worker regardless of the level of skill.

Why should companies mooching off the government expect to be treated any differently than the companies treat their lowest-level employees?

What's good for the goose is good for the gander.

[Mopar151]

33. Heard of "Federal Prevailing Wage"?

The Feds routinely use a provision in construction and maintainence contracts which, essentially, requires the contractors to pay the equivalent of union scale in the area.
And, I can tell you that when you work on DARPA or DOD development contracts, timekeeping procedures are very specific - like handwritten in ink without changes, and signed.

[JDPriestly]

38. If my contract means a lot to a company, I would have the right to

write a provision into the contract limiting the amount of money to be paid by my contract to the company's executives. Yes.

This would be especially true of government contrasts that are based on cost-plus. And lots of our defense contracts are cost-plus. We should not pay exorbitant salaries in those contracts.

You can't ask hungry children to forgo breakfast or lunch in order to pay the CEO of a government contractor another $500,000. That is obscene. It is child porn at its worst. Please.

[JDPriestly]

42. If a company only does work for the government, it is no more than

an agency or agent or arm of the government.

If it thinks it is anything else, it is a fool, and its CEO and board members are all fools, and none of them deserve more than $400,000 per year in compensation.

[edgineered]

14. Thinking of it (cap on reimbursement) along the lines of per diem

reimbursements, limits are completely acceptable. One can spend as much on lodging, food, etc as he wants, the company will only pay what the rate is.

[dkf]

16. A bid is a bid. Is a government contract now going to be seen as an albatross?

They better watch out or they will land up limiting their access from corporations who will want to avoid this type of thing.

[JDPriestly]

37. The government does this with Medicare reimbursements.

That has not stopped doctors from serving their patients as they wish.

See my comment below.

A company that has no contracts other than government contracts, no income other than government income, is not a private company. It is a government agency. And it should limit its CEO salaries and pay its employees accordingly. Civil service anyone?

Too many American companies wax indignant about "too much regulation" or "too much government" and then fill their coffers with taxpayer money.

Let's face it, we are all in this together.

I hope there are not too many companies working only for government contracts. But especially in the defense industries there may be some.

This is the height of hypocrisy -- complaining about tax rates and then dipping into the tax dollars. That's ugly. Repugnant as a matter of fact.

[JDPriestly]

48. The government contracts are usually big enough that companies

can handle them without taxing them with a lot of CEO pay and still do well. Our CEOs are way overpaid if you compare their salaries to comparable salaries in other countries like Germany.

[1StrongBlackMan]

51. Governments dictates salaries all the time …

Through prevailing wage requirements; and it’s something that Democrats used to support.

Besides, from many of your other posts, I would have thought you’d be all over this … as this proposal is a truly market-based solution … just ask the entire insurance industry (public and private). Hospitals/Medical Providers are free to change whatever they want for their services; but the insurers will only reimburse them at a negotiated rate.

… But I guess you’d have to start with the recognition that the government is truly a market participant; something conservatives are wont to do.

[Initech]

13. So they get six figures worth of government income, but the mom on welfare is the moocher.

[n2doc]

19. good idea

Wish it would happen, but probably no chance with the pukes in control of the House. Maybe he can use this to help push for a Dem majority in 2014?

[florida08]

22. lolol

Nice tune but no one is going to dance to that. Hell has the sequester invoked any furloughs in Congress? There's your answer.

[kentuck]

23. He has gotten very active with his progressive agenda lately...

For some reason...?

[ProSense]

26. Maybe it's

"He has gotten very active with his progressive agenda lately...For some reason...?"

...because he can?

E.J. Dionne and Robert Borosage agree: push the President's best initiatives.
http://www.democraticunderground.com/10022807040

Raise That Wage

By PAUL KRUGMAN

President Obama laid out a number of good ideas in his State of the Union address. Unfortunately, almost all of them would require spending money — and given Republican control of the House of Representatives, it’s hard to imagine that happening.

One major proposal, however, wouldn’t involve budget outlays: the president’s call for a rise in the minimum wage from $7.25 an hour to $9, with subsequent increases in line with inflation. The question we need to ask is: Would this be good policy? And the answer, perhaps surprisingly, is a clear yes....the current level of the minimum wage is very low by any reasonable standard. For about four decades, increases in the minimum wage have consistently fallen behind inflation, so that in real terms the minimum wage is substantially lower than it was in the 1960s. Meanwhile, worker productivity has doubled. Isn’t it time for a raise?

Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment.

<...>

So Mr. Obama’s wage proposal is good economics. It’s also good politics: a wage increase is supported by an overwhelming majority of voters, including a strong majority of self-identified Republican women (but not men). Yet G.O.P. leaders in Congress are opposed to any rise. Why? They say that they’re concerned about the people who might lose their jobs, never mind the evidence that this won’t actually happen. But this isn’t credible...today’s Republican leaders clearly feel disdain for low-wage workers. Bear in mind that such workers, even if they work full time, by and large don’t pay income taxes (although they pay plenty in payroll and sales taxes), while they may receive benefits like Medicaid and food stamps. And you know what this makes them, in the eyes of the G.O.P.: “takers,” members of the contemptible 47 percent who, as Mitt Romney said to nods of approval, won’t take responsibility for their own lives.

- more -

http://www.nytimes.com/2013/02/18/opinion/krugman-raise-that-wage.html

[Pragdem]

24. Even when Obama says something that his critics on the left likes...

You get the snarky comments from the fucking morons.

I'm tired of being civil to them because that's all they'll ever be... worthless ankle-biting morons that want subsidies to comfortably continue being worthless ankle-biting morons, biting the hand that doesn't even need to feed them to be where he is.

---

In response to the OP: It's tragic that people the government is paying make more than the President. I wasn't aware of this until the President used his bully pulpit to bring awareness.

[Fuddnik]

27. We've learned to watch what he actually does.

Not what he says. They're usually the opposite.

[BrotherIvan]

66. It's difficult to understand whom you mean by morons.

[zipplewrath]

28. Define "pushes"?

I'm kinda curious what this means from Obama.

[NCTraveler]

34. I don't see anything that backs up "Obama pushes"? nt.

[ProSense]

36. Obama seeks to limit top pay for federal contractors

Obama seeks to limit top pay for federal contractors

(Reuters) - The White House proposed legislation on Thursday to cap the pay of federal government contractors at no more than the U.S. president's annual salary, saying it wanted to stop "wasteful expenditure."

The president makes $400,000 a year and the current cap on pay for executives at federal contractors is due to be raised in the coming weeks to about $950,000 from $763,000, the White House Office of Management and Budget said.

"This wasteful expenditure of taxpayer resources must stop," OMB official Joe Jordan said.

Jordan said the cap on contractor pay has climbed so steeply because it is pegged to private sector executive pay increases. The administration's proposal would allow exceptions in situations where recruitment is difficult.

- more -

http://www.reuters.com/article/2013/05/30/us-usa-obama-contractors-idUSBRE94T14F20130530

[zipplewrath]

39. So nothing

What is the push? Him asking? Him making a speech? Him pointing out the obvious? Is this what constitutes "pushing"?

[ProSense]

41. Were

"What is the push? Him asking? Him making a speech? Him pointing out the obvious? Is this what constitutes "pushing"? "

...you expecting him to take the proposal and "push" it into the chest of a member of Congress.

The level of absurdity rises!

[NCTraveler]

43. Where is the proposal? What is it a part of.

Did he whisper it to a news person? Nothing you have put shows this push.

[ProSense]

45. "Did he whisper it to a news person?"

That's what I heard.

[zipplewrath]

44. coerce/cajole

I "expect" him to do little at all.

The definition would involve either coercing those otherwise opposed, or making it otherwise uncomfortable to oppose it. It isn't apparent that he has done either, much less anything that could be considered "pushing".

[ProSense]

46. "I 'expect' him to do little at all"

I don't care what you "expect" him to do, and to satisfy your quest for more information and what "push" means, try Google.

[zipplewrath]

69. Make up your mind

You asked me what I expect. Now you say you don't care. Make up your mind.

And you still can't explain what the OP means by "push".

[JDPriestly]

35. If the federal government is your only client, then you are not a private

company, you are the same as a government agency. The government decides the specs for your service or product. You are merely a sham corporation or company that funnels government money to your employees.

There is nothing private about a company if its only business is government business.

Who's fooling whom?

[ProSense]

47. Whew!

I thought you were going to ask about the word "pushes"

Agree with your comment.

[JDPriestly]

52. I totally support this whether President Obama is "pushing" or not.

At least someone in his administration has dared to mention this scandalous use of public money.

This is the REAL SCANDAL of the year, whether the President is pushing for change or not. Someone in his administration obviously is. That's good enough for me. Refreshing and positive, I must say.

[1StrongBlackMan]

49. I love it …

The proposal is a truly market-based solution … just ask the entire insurance industry (public and private). Hospitals/Medical Providers are free to change whatever they want for their services; but the insurers will only reimburse them at a negotiated rate. Goose … Gander.

[Arctic Dave]

53. Wake me when something actually gets accomplished.

Until then.

Talk. Talk. Talk.

[newmember]

54. What a bunch of bullshit and some people are actually buying this

[ProSense]

56. Please,

"What a bunch of bullshit and some people are actually buying this"

...explain what the "bunch of bullshit" is, and why it's funny?

I mean, "some people" may not be as smart as you.

[newmember]

57. wake me up when it happens

Just make sure it's after AIG executives got their millions in bonuses from TARP.

Oh that's right Obama was against that also.

[ProSense]

58. Wait,

"wake me up when it happens

Just make sure it's after AIG executives got their millions in bonuses from TARP.

Oh that's right Obama was against that also."

...your explanation is nonsense? What the hell does any of that have to do with the OP?

FYI (for the next time you decide to comment on things you know nothing about)

The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase assets and equity from financial institutions to strengthen its financial sector that was signed into law by U.S. President George W. Bush on October 3, 2008. It was a component of the government's measures in 2008 to address the subprime mortgage crisis.

The TARP program originally authorized expenditures of $700 billion. The Dodd–Frank Wall Street Reform and Consumer Protection Act reduced the amount authorized to $475 billion. By October 11, 2012, the Congressional Budget Office (CBO) stated that total disbursements would be $431 billion and estimated the total cost, including grants for mortgage programs that have not yet been made, would be $24 billion.[1]

https://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program

[newmember]

59. A lot when it comes to Obama and executive pay , he let Geithner have free reign......

give me a break and then Obama acted shocked when these fat cats got their millions in bonuses.

Peddle this to some one that buys your bullshit

[ProSense]

60. More

"A lot when it comes to Obama and executive pay , he let Geithner have free reign......

give me a break and then Obama acted shocked when these fat cats got their millions in bonuses.

Peddle this to some one that buys your bullshit"

...fact-free nonsense and bravado. Clearly, you know something about peddling "bullshit."

You attitude sucks, and your grasp of the facts leave a lot to be desired.

Switzerland Clamps Down Hard On Executive Pay — Should The U.S. Follow Suit?

By Pat Garofalo

Yesterday, voters in Switzerland overwhelmingly approved new measures to clamp down on executive pay. Under the approved referendum — which means that the new provisions will be added to the Swiss constitution — shareholders will have the ability to veto executive pay packages, so-called “golden parachutes” will be outlawed, and executives who defy the rules could see jail time. As the Wall Street Journal’s Andrew Peaple wrote, “Swiss voters’ anger is understandable. Like other countries, it has seen executive pay rise out of all proportion over the past decade”:

Switzerland has the highest remuneration per board member in Europe, according to Deloitte. Pharmaceutical company Novartis’s recent offer of a six-year $76 million golden parachute to outgoing Chairman Daniel Vasella is the latest example of seemingly egregious rewards. UBS Chairman Axel Weber was paid $5.3 million when he joined the bank this year. Compared with Swiss average wage of $73,500, such payments look out of whack.

The European Union has also approved new restrictions on bonuses at large financial firms.

Many of the same problems that led to Swiss frustration with CEO pay apply here in the U.S. For instance, Citigroup CEO Vikram Pandit walked off with millions of dollars after vaporizing most of his company’s value. Duke Energy paid its former CEO $44 million for working literally one day.

Skyrocketing executive pay (along with growing pay in the finance industry) is a huge component in America’s growing income inequality. In fact, “Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.” Special tax deductions for executive pay cost taxpayers billions of dollars per year.

In the Dodd-Frank Wall Street reform law, shareholders of U.S. corporations were also given new powers meant to rein in executive pay. However, Dodd-Frank only gives shareholders a non-binding vote, meaning that the corporation is able to essentially ignore it.

- more -

http://thinkprogress.org/economy/2013/03/04/1666781/switzerland-executive-pay/

It should have been binding, but at least the non-bidning can have an impact.

Teamsters Applaud SEC's Navistar Decision Upholding Dodd-Frank
http://www.teamster.org/content/teamsters-applaud-secs-navistar-decision-upholding-dodd-frank

<...>

The Teamsters filed the same proposal at Coca-Cola Enterprises, which petitioned the SEC for no-action to omit the golden parachutes proposal from their proxy materials based on the initial Navistar decision, says Louis Malizia, assistant director in the Teamsters Capital Strategies Department. “We are confident the SEC will follow its reversal on Navistar and not grant CCE no-action,” Malizia says.

http://www.complianceweek.com/sec-staff-reverses-ruling-on-teamsters-proposal/article/193829/

http://www.democraticunderground.com/10022461700

[newmember]

62. Holy shit man , I'm not disagreeing with the premise

What I'm telling you that it's bull shit from the administration and it's not going to happen.
So stop pasting articles

[ProSense]

63. First,

"Holy shit man , I'm not disagreeing with the premise

What I'm telling you that it's bull shit from the administration and it's not going to happen.
So stop pasting articles"

...I'm not a "man." Secondly, I don't really give a shit what you disagree with, your attitude sucks and you have no fucking idea what you're talking about.

I'm even less interested in your predictions. You came in and dumped your transparent bullshit in the thread.

Enjoy your stay.

[newmember]

64. I don't buy into feel good stuff that's bull , you want to say I shit on it. I told the truth

I go by past performance

[ProSense]

65. Here

"I don't buy into feel good stuff that's bull , you want to say I shit on it. I told the truth

I go by past performance"

...let me quote you: "Peddle this to some one that buys your bullshit"

[ProSense]

61. Oh, I forgot to

welcome you to DU. Longing for home?

[spanone]

55. k&r... guess many would rather this President propose nothing

[ProSense]

67. It probably goes deeper than that. n/t

[Scurrilous]

68. K & R