• This is a rush transcript from "The Journal Editorial Report," October 24, 2009. This copy may not be in its final form and may be updated.

    PAUL GIGOT, FOX HOST: This week on the "Journal Editorial Report," the government moves to cut compensation at all banks, whether or not they were bailed out. Will they soon be setting wages for all of us?

    And the White House picks another target. Move over, FOX News, the U.S. Chamber of Commerce is the latest group to find itself in the administration's cross hairs.

    Plus, a special election in New York is pitting prominent Republicans against each other and raising doubts about the party's strategy to take back the House in 2010.

    Welcome to the "Journal Editorial Report." I'm Paul Gigot.

    The White House pay "czar" Kenneth Feinberg announced plans this week to drastically cut the salaries of the highest paid employees at the seven companies that received the biggest taxpayer bailouts. The cash portion of their salaries will be slashed an average of 90 percent over last year. And the Federal Reserve proposed new pay guidelines for all banks it regulates, whether or not they were bailed out.

    President Obama praised Feinberg's ruling, calling it an important step forward in curbing the influence of executive compensation on Wall Street, while still allowing those companies it succeed and prosper.

    (BEGIN VIDEO CLIP)

    PRESIDENT BARACK OBAMA: I've always believed that our system of free enterprise works best when it rewards hard work. This is America. We don't disparage wealth. We don't begrudge anybody for doing well. We believe in success. But it does offend our values when executives of big financial firms, firms that are struggling, pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat.

    (END VIDEO CLIP)

    GIGOT: Joining the panel this week, Wall Street Journal columnist, Mary Anastasia O'Grady; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.

    So, Mary, I think a lot of our viewers might think, OK, these bankers paid themselves handsomely before the panic and then they got bailed out by the taxpayers and now having pay cuts, case of just desserts?

    MARY ANASTASIA O'GRADY, COLUMNIST: In the case of the seven biggest companies that got the TARP money from the government...

    GIGOT: And still have the TARP money.

    O'GRADY: And still have the TARP money, it might be. We don't know because we — there's a reason why the market sets compensation. A single person sitting in Washington really doesn't know how much any of the employees are worth to the company.

    GIGOT: But now some might be less than $200,000 he says.

    (LAUGHTER)

    O'GRADY: I think the bigger concern is that the fed and the Treasury now say that they can regulate compensation for the entire financial services industry. And that's a lot more troubling. I mean, and the other thing that's really troubling here to me is that those who caused this problem are really not being held responsible at all. And that would be the people at the Federal Reserve.

    GIGOT: Oh, oh.

    (LAUGHTER)