Rep. Brad Sherman (D-CA), a senior member of the House Financial Services Committee, has been a stalwart skeptic of the Treasury’s bailout program since it was first announced in the fall.
But he’s particularly savvy on the issue of executive compensation — Sherman, a certified public accountant, was among the first to challenge the Obama administration’s recent CEO pay limits as riddled with loopholes.
Unfortunately, Sherman told me that he believes the executive compensation limits added to the Senate’s stimulus are going to get removed during conference talks with the House. The reason: a new Congressional Budget Office estimate that the pay caps will cost the government $10.8 billion in lost tax revenue over the next 10 years.“The plan is to take out the executive compensation provisions … and blame the Republicans for setting out the level [of $800 billion]” for the final version of the stimulus, Sherman said.
“The question,” he added, “is whether the two senators from Maine, in particular, want to see their insistence on a [maximum] dollar amount [for the stimulus] … be the reason why the executive compensation stuff comes out of the bill.”
I’ve asked the offices of Senate Majority Leader Harry Reid (D-NV) and Finance Committee Chairman Max Baucus (D-MT), two members of the conference committee that will hammer out the final version of the stimulus, whether removing the CEO pay caps is indeed on the table — we’ll keep you posted.
Late-Night Update (11pm): Still no response from Reid or Baucus, but an AP report this hour suggests that their silence on the CEO pay caps may speak volumes. From that story:
There was also pressure [during private stimulus negotiations] to drop a provision limiting compensation for top executives of companies receiving federal bailout assistance. [The limits] add to the cost of the bill, and … could presumably be passed in different legislation later in the year.