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Congressman Garamendi: Taxpayers Getting a Raw Deal with Record Wall Street Compensation

January 15, 2010
Press Release

WASHINGTON, DC – Congressman John Garamendi (D-Walnut Creek, CA) today issued the following statement after it was reported by the Wall Street Journal that the top 38 financial firms in America are on pace to deliver $145 billion in compensation, an all time record.

"The public is sick and tired of robber barons guarding the gates of our economy," said Congressman Garamendi, who as California’s insurance commissioner for eight years, regulated the country’s largest financial sector.

"Wall Street greed and insufficient government oversight nearly led our financial system to complete collapse, and many of those bankers who came to the taxpayers looking for a handout are living high on the hog of taxpayer-derived profits," Garamendi added. "To fix an economy they broke, I support taxing the excess Wall Street bonuses of any financial firm that received a bailout and using these funds to expand small business loans. This will provide small business owners with the capital they need to create local jobs in our communities."
Employees at the top 38 financial firms are expected to earn 18 percent more in 2009 than they did in 2008. Meanwhile, despite significant job creation spawned by the Recovery Act and other jobs bills, 10 percent of Americans (15.3 million people) and 12.3 percent of Californians (2.3 million people) remain unemployed. The average compensation at the 38 financial firms is an estimated $149,192. The average median wage in the United States was $31,410 in 2007.  
Congressman Garamendi was an original co-sponsor of Congressman Peter Welch’s (D-Vermont) Wall Street Bonus Tax Act (H.R. 4426). The bill would tax bonuses at firms that have received assistance through the Troubled Asset Relief Program at a rate of 50 percent for all bonus compensation in excess of $50,000. Revenues generated through the tax would fund a new direct lending program administered by the Small Business Administration (SBA).