Republicans and Democrats are calling for strong oversight of the federal government's $700 billion bailout plan for Wall Street, adding the initiative must set limits on compensation packages for the chief executives of financial institutions rescued by Washington.
Republican presidential candidate John McCain called for setting strict limits on C.E.O. compensation during the weekend.
"No CEO of any corporation or business that is bailed out by us, that is rescued by American tax dollars, should receive any more than the highest paid person in the federal government," said McCain, according to Reuters.
Added House Speaker, Nancy Pelosi: "We will not simply hand over a $700 billion blank check to Wall Street,"
The U.S. Treasury would force financial institutions with troubled assets to "meet appropriate standards for executive compensation," under a proposal drafted by House Democrats, the Washington Post reported over the weekend. The proposal would also include a ban on incentives that encourage chief executives to take excessive risks and the ability to rescind bonuses, the paper added.
Christopher Dodd, chairman of the Senate Banking Committee, is circulating a plan that will most likely clash with the initiative proposed by the Bush Administration. The plan, according to the Wall Street Journal, would limit executive compensation "to exclude incentives for executives to take risks that the Secretary deems to be inappropriate or excessive."
And Democrat Barney Frank, chairman of the House Financial Services Committee, said he has started drafting additions to the Bush Administration's bailout plan.
"There are going to be federal tax dollars buying up some of the bad paper," said Frank, according to a New York Times report. "They should accept some compensation guidelines, particularly to get rid of the perverse incentives where it's 'heads I win, tails I break even.' "
Democrats have said they will push for an economic stimulus initiative, one that includes middle class homeowner protections, as part of the $700,000 bailout plan, or as part of a future Congressional budget resolution.