Bowing to populist anger, the House voted today to prohibit pay and bonus packages that encourage bankers and traders to take risks so big they could bring down the entire US economy. Passage of the bill on a 237-185 vote followed the disclosure a day earlier that nine of the biggest US banks, which are receiving billions of dollars in federal bailout aid, paid individual bonuses of $1 million or more to nearly 5,000 employees.
"This is not the government taking over the corporate sector," Rep. Melvin Watt, a Democrat, said of the House action. "It is a statement by the American people that it is time for us to straighten up the ship." Aware of voter outrage about the bonuses, Republicans were reluctant to debate against the bill but voted overwhelmingly against it. The legislation's ban on risky compensation would apply to any firm with more than $1 billion in assets. (Read more executive bonuses stories.)