Wall Street bonuses ‘offend’ White House officials

Wall Street firms that are rewarding their executives with large bonuses as the economy tries to recover and small businesses can’t get the credit to help create new jobs were blasted by White House and Senate officials on Sunday.

“The bonuses are offensive,” Senior Adviser David Axelrod said on “This Week” on ABC. “The most offensive thing is, we haven’t seen the kind of increase in lending that … we should. There are a lot of small businesses, creditworthy businesses around this country, who still can’t get the capital they need to grow, which is important for our economy, and you’ve seen these same institutions spend tens of millions of dollars lobbying the Congress to try and stop financial regulatory reform.”

Sen. Chris Dodd, D-Conn. on NBC’s “Meet the Press” also criticized banks for failing to make more credit available to small businesses. He is chairman of the Senate Banking, Housing and Urban Affairs Committee.

“When you see these bonuses being paid out, it’s a source of outrage in the country, and it should be,” he said “What are these people thinking about at these companies?”

Goldman Sachs Group Inc.’s is expected to give more than $20 billion in bonuses – a record for the year when combined with earlier bonuses. Compensation is also up at other firms that are enjoying higher trading as the stock market has recovered to the point the Dow Jones industrial average once again broke 10,000. Citigroup is expected to pay $5.3 billion in bonuses to its workers and Bank of America, $3.3 billion.

Chief of Staff Rahm Emanuel said on CNN’s “State of the Union” that Americans “have a right to be frustrated and angry” at reports that Wall Street is preparing to hand out more big bonuses a year after the government provided $700 billion to rescue some lending institutions. “The risks that they took, took the economy to a place, it was near a depression,” Emanuel said.

The administration officials are outraged that the financial industry wants to weaken or stop proposed reforms. The House of Representatives has approved a measure to put new limits on executive pay, but the Senate has not voted.

Emanuel said stabilized institutions are “trying to fight consumer offices and the type of protections that will prevent another type of situation where the economy is taken over the cliff by the actions taken on Wall Street and the financial market.”

For the institutions that owe bailout money to the government, Pay Czar Kenneth is allowed to scrutinize compensation packages. However, the administration is trying to use “moral suasion” with some companies, Axelrod said. Other firms that have paid the government back, such as Goldman Sachs, are not subject to Feinberg’s oversight.