Thanks to a last-minute change pushed by the Bush administration, the $700 billion bailout has a giant loophole Wall Street executives will be able to float golden parachutes through. Congress put unprecedented restrictions on lofty pay into the final bill, but the only enforceable one became inapplicable after a one-sentence modification limited its scope, the Washington Post reports.
The provision barred companies from spending more than $500,000 on pay to their top five execs, but the change made that limit apply only to firms that sold troubled assets to the government in an auction, which the Treasury Department planned to do at the time. Auctions have not been used for any of the $335 billion committed so far, and Treasury now has no plans to use them in the future. "The flimsy executive-compensation restrictions in the original bill are now all but gone," a senator says.