Centrist GOP Sen. Olympia Snowe (ME), whose support the White House is counting on to pass health reform, the budget, and climate change, offered a warning to President Obama today: Clarify your position on taxing bonuses at bailed-out companies, or risk losing more political capital.
“I think the president has an obligation to address this [and to] explain why he doesn’t think this is necessary,” Snowe told reporters today, referring to Obama’s initial embrace of taxing bonuses — which was followed days later by a pullback from his advisers amid questions about the measure’s constitutionality.“We will not have the moral authority to declare a financial imperative in the future if we fail to address this situation right now,” Snowe said, invoking Obama’s famed oratorical fluency: “The president is the person who can connect that [public] anxiety, that frustration, that anger with the policies that are going to restore trust and confidence.”
Snowe’s plea for clarity from the administration on its bonus-taxation stance has a long history behind it — she and Sen. Ron Wyden (D-OR) saw their initial 35% tax on bonuses at bailed-out firms get chopped from the final version of the stimulus bill.
Meanwhile, changes made to a separate executive-pay measure commanded the public’s attention, while a more stringent bonus-tax push in the House is dying on the vine, thanks in part to insufficient support from the White House.
Now the administration is left promising to rein in executive pay further, while facing pressure from Wall Street to pull back on the effort entirely or risk undercutting the latest iteration of the Treasury Department’s financial rescue effort.
Will the White House heed Snowe’s warning and offer a detailed proposal to claw back and/or rein in all types of compensation at bailed-out companies? If not, they could be risking a pivotal vote on the year’s must-pass legislation.