Two powerful Congressional Democrats Wednesday pushed Treasury Secretary Henry Paulson to place tighter restrictions on pay to bank executives.
In a joint letter to Paulson, House Speaker Nancy Pelosi (D-CA) and Majority Leader Harry Reid (D-NC) said they were particularly concerned about so-called "Golden Parachute" packages to executives from banks taking part in the $700 billion Emergency Economic Stabilization Act.
Noting that the act as provisions to both protect taxpayers from having their funds used to support "excessive compensation" at participating institutions and also gives the Treasury Secretary broad discretion to set terms of transactions.
"We continue to hear from constituents who are outraged at the level of compensation being provided to executives at institutions participating in the new Capital Purchase Program," said the letter, which also noted news reports suggesting six major institutions in the program plan to pay their executives billions of dollars. "Such reports understandably infuriate many Americans, who resent having their taxpayer dollars used to support such institutions, especially in light of the serious and growing economic pressures confronting working Americans."
Paulson as earmarked $250 billion of the rescue plan for the Capital Purchase Program (CPP).
The Reid/Pelosi letter urges Paulson to "go beyond the letter of the law" to keep the payments in check. "We hope you will seriously consider strengthening the restrictions on executive compensations that apply to institutions participating in the CPP," it said. "We would urge you, in particular, to consider the possibility of further restrictions on the use of 'golden parachutes' at such institutions." A spokeswoman for the Treasury Department said only that the letter has been received and is being reviewed.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.