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By Amanda Carpenter

Big business dare

Business groups are daring President Obama to impose pay caps on labor union bosses in light of indications the White House will limit how much corporate executives can be paid.

Mr. Obama has argued that "corporate greed" has contributed to the economic crisis and appointed a "compensation czar" to review executive pay for several companies receiving taxpayer bailout money. Now White House officials have told the press that legislation should be enacted to limit executive pay in private companies through nonbinding shareholder votes.

The Workforce Fairness Institute, which has lobbied heavily for the defeat of the Employee Free Choice Act, which would ease organization rules for unions, argues that labor officials have acted just as poorly as the "greedy corporate executives" who the president has blamed for the economic downturn. The group points to a 2008 Hudson Institute study that suggests unions have short-changed benefits for their rank and file in favor of generous executive compensation packages and to pad the coffers of their political allies, who are mostly Democrats, as evidence.

"On average, the 21 largest unions' pension plans had less than 70 percent of the funds that they would need to cover their total obligations, and none were fully funded," the study said. "Seven were less than 65 percent funded. Yet 23 officer and staff funds from the same unions had 88.2 percent of the funding they would need to pay promised pensions, including seven full-funded plans and another 13 with at least 80 percent of the required funds."

Business leaders who oppose plans to limit executive pay say if it is to be passed, labor unions must be included as well.

"Given that union bosses' job performances have yet to be scrutinized despite numerous, credible reports that they have engaged in 'creative accounting' and have mismanaged and underfunded worker pension plans, while wholly funding their own, is deplorable," said Katie Packer, executive director of the Workforce Fairness Institute.

Frank walks off

House Financial Services Committee Chairman Rep. Barney Frank, Massachusetts Democrat, became so frustrated during an interview on CNBC about executive pay legislation he ripped his earpiece out and walked off camera.

CNBC host Mark Haines has been a critic of executive pay compensation legislation in the past, calling the increased calls for regulation "scary." Mr. Frank supports limiting pay by giving nonbinding shareholders more power to limit it and didn't like Mr. Haines questions about it.

"I hate to burn down the house here, but it seems to me you are dealing with a model that no longer works because we don't have mom and pop sitting at home holding these shares," Mr. Haines said. "The shares are primarily in mutual funds and the ownership is a derivatives instrument and I don't see how you get there."

After some squabbling, Mr. Haines said, "My point is the shareholder is at arms length to begin with."

"Do you want to lose me?" Mr. Frank fumed before abruptly ending the interview. "Do you want to lose me? I'm trying to respond to your misrepresentation. I apologize but this interview is over. I get three different questions, different angles. I try to respond but you want to interrupt me, you don't like what I'm saying - you can find someone else to interview."

"Fine, goodbye, sir," Mr. Haines retorted.

Amanda Carpenter can be reached at acarpenter@washingtontimes.com