[Congressional Record (Bound Edition), Volume 155 (2009), Part 7]
[House]
[Page 8398]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       RESPONDING TO WALL STREET

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
California (Mr. Sherman) for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, yesterday Wall Street won three great 
victories. First, a plan was announced under which Wall Street puts up 
6 percent of the money, assumes 6 percent of the risk, and takes 50 
percent of the profits.
  Second, the Senate announced that it was going to back burner the 
proposal to use the Tax Code to recoup the unjust enrichment received 
by certain executives on Wall Street.
  And finally, the media continued its condescending drumbeat in which 
speaker after speaker in the media says the only proper approach is 
that one must denounce Wall Street, and then capitulate to Wall Street. 
And any of us who want to actually do anything that Wall Street 
disagrees with are just a bunch of angry peasants with pitchforks.
  Well, let me say, anger is no vice and gullibility is no virtue, and 
faith in Wall Street is not the one true faith.
  We have got to be willing to take action that Wall Street disagrees 
with and to deal with an establishment press which will then say we are 
governing out of anger. I am very angry, but I am not blinded by my 
anger. I am also not blinded by a gullible faith that whatever Wall 
Street does will be in the national interest.
  First, let's take a look at this program where we put up 94 percent 
of the cash, Wall Street puts up 6 percent of the cash, but Wall Street 
gets 50 percent of the profit. You know with a deal like that, you 
could probably get Wall Street to buy lottery tickets for $3 a piece. 
They will put up not $3 a piece, but 6 percent of the $3, the Federal 
taxpayer puts up the rest, and then the winnings are split 50/50. Even 
if the average lottery ticket only pays out 20 cents for every ticket, 
that is a winning investment for Wall Street.
  For us to give them half the profit while they take only 6 percent of 
the risk is a massive transfer of wealth from the American people to 
the hedge funds on Wall Street.
  Second, let's look at this issue of bonuses and compensation. Now we 
passed a bill in this House last week that was imperfect. It was 
imperfect because it left alone million-dollar-a-month salaries, and it 
allowed any of the big Wall Street firms that were planning to pay 
multimillion-dollar bonuses to simply recast their compensation and 
call it million-dollar-a-month salaries, or raise them to $2 million a 
month, and the bill we passed would have no effect.
  Third, the bill we passed last week, while it would deal with the AIG 
bonuses, did not deal with the Merrill Lynch bonuses. That is why 
today--and I hope to have some additional cosponsors before I introduce 
the bill--but later today, I will introduce legislation that will 
impose an excise tax that doesn't look at bonuses separate from the 
rest of the compensation package, but looks at the entire compensation 
package. It says if the package is over half a million dollars a year 
and you're working for a company that would be in bankruptcy right now 
if you weren't bailed out by the Federal Government, then in effect you 
are being paid that enormous salary with taxpayer dollars only because 
the taxpayers came through and bailed out the company that is paying 
you that money. And for that reason, we are going to insist that unless 
you want to face a major tax, you return to your employer all of your 
compensation in excess of half a million dollars. This is an approach 
that I think is fair. It is not punitive. It is not confiscatory. It 
simply takes from executives the huge amount of compensation that they 
received only because the rules of capitalism were suspended and their 
companies that should be in bankruptcy or receivership are instead 
operating independent of receivership and are paying salaries that 
exceed what should be paid to an entity that is dependent upon the 
Federal Government.
  The bill will also provide that if the Treasury issues executive 
compensation regulations, people will be able to receive restricted 
stock without limitation.
  So I look forward to getting additional cosponsors for my tax bill 
and responding to Wall Street logically and without gullibility.

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