Sen. McCaskill walks the walk on executive pay, earns this week's BF Wings of Justice Award

WINGS OF JUSTICE

Sen. Claire McCaskill

The sign on President Harry Truman's desk that said "The buck stops here" had more to do with accountability in the executive than with executive pay. But something makes us think Truman would've gotten along quite well with fellow Missourian, Sen. Claire McCaskill (D-MO).

Her latest bill is a clear example of that same Show Me State chutzpah. While every lawmaker with a microphone can be heard railing against huge Wall Street bonuses and exorbitant CEO pay, McCaskill is actually doing something about it.

Last Friday, McCaskill introduced a bill to cap employee compensation for companies that receive assistance from the government. Under McCaskill's Cap Executive Officer Pay Act of 2009, recipients of TARP money or other taxpayer assistance would only be able to pay their officers as much as President Barack Obama makes, or $400,000 a year.

Many don't realize that even shareholders have virtually no control over executive pay, so there's not much anyone can do to change the situation outside of public protest and congressional action.

Even experts are beginning to call on lawmakers to help. In a recent op-ed for The New York Times, economist Robert Frank argues against executive pay caps in all cases except Wall Street and banks:

"The financial industry, however, may be an exception. A money manager's pay depends primarily on the amount of money managed, which in turn depends on the fund's rate of return relative to other funds. This provides strong incentives to invest in highly leveraged risky assets, which yield higher average returns. But as recent events have shown, these complex assets also expose the rest of us to considerable systemic risk.

On balance, then, the high pay that lures talent to the financial industry may actually cause harm. So if Congress wants to cap executive pay in financial institutions receiving bailout money, well and good. (our emphasis)"

We at BuzzFlash don't like giving out awards just for doing one's job. Nor do we mean to make a habit of granting accolades to lawmakers for submitting legislation that has little chance of becoming law, just to make a point. But McCaskill revealed her methodology in an interview with The Huffington Post:

"I was having a conversation with someone this morning and they said, 'None of them should make more than the president.' And he was right. None of them should be making more than the president. So I walked down the hallway and said 'draft it,' and we went to the floor and introduced it today."

McCaskill saw an injustice, so she put together a bill and introduced it. She didn't coordinate with anyone (not even the White House), nor did she conduct opinion polls to figure out what she could get away with politically. She just did it.

So far, according to the U.S. government's online legislation tracker, the bill has no co-sponsors. In an age where every politician wants to make hay of the executive pay issue but no one seems willing to do anything about it, we salute McCaskill, who accompanied her no-nonsense legislation with a fiery but sensible speech that would shame any self-respecting bailout funds recipient (or is that an oxymoron?).

"I'm mad. Everyone I work for is mad. You know, anger can be constructive if we channel it. And I'm here today to say it's time that we channel that anger and change the law. We don't need anger. We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer," McCaskill told her colleagues from the Senate floor. "What planet are these people on? What could they be thinking about? ...It's time for everyone to realize that we must have our financial institutions survive, but not with a culture that thinks it's OK to kick the taxpayer in the shins while they drink champagne and fly in fancy jets. It doesn't work, not in the United States of America."

For their part, Obama Administration officials say they may announce new rules for executive pay later this week, but only for banks that receive "exceptional assistance" from the bailout program... whatever that means. And you can bet the salary caps mandated by the Treasury Department will be higher than $400,000.

But, as McCaskill pointed out, that amount is still eight times the median household income in this country:

"They owe us some common sense. And if any of them think it's a hardship to take the salary of the president of the United States, I dare them to say so out loud."

Well said. With this bill, McCaskill is daring her Senate colleagues to admit they support exorbitant pay. Now that the bill has been submitted to the Senate Banking Committee, BuzzFlash would like to dare Chairman Chris Dodd (D-CT) to hold a hearing on McCaskill's bill.

WINGS OF JUSTICE

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Nominated by BuzzFlash staff. To see a full list of past nominees, click here.

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