the obama administration's special master on pay, kenneth feinberg, has decided those payments were "ill-advised," but not illegal. stephanie dhue talked with feinberg this morning and asked him about that decision. >> they were too big, some individuals were getting in excess of $10 million in bonus payments over a five-year period, there were severance payments where individuals, companies, after they received tarp, we're paying people walking out the door, no longer working at the company, there were gross-ups, where in order to cover tax payments, there would be additional money, allocated to these individuals, we concluded after months of review, these companies should not have done what they did. >> reporter: six banks that made what feinberg calls "ill- advised" payments still owe taxpayers. they are citibank, c.i.t. group, which has since gone through bankruptcy, suntrust, regions financial, m&t bancorp and a.i.g. 11 repaid tarp, including j.p. morgan chase, bank of america and goldman sachs. none of the banks rescinded those payments. feinberg says he didn't think he had the

feinberg coming on board. he is bringing change with his leadership, and now he has met with the president. he is putting a face to the name, and he is driving that change through. >> suzanne: you have been very critical of how b.p. handled this crisis. >> i have. >> suzanne: if you were advising them, what would you tell them? >> i think they fell down on four key areas -- first of all, it was a failure to analyze failure. special since it was one that looked light it could be avoided in the first place. number two, they lacked a real crisis plan in the beginning. what happens in these situations is you need a bold response to this, and this wasn't happening. and there was too much inspection and not enough execution. and there are plans to correct that. and finally, the gulf between gestures and results. and all we've heard of is gesturing, but i think we are seeing that change. >> suzanne: at the end of the day, b.p. is an oil company. and a tarnished image doesn't mean much in terms of their product. peopl

it's not an unfamiliar role for feinberg. he made a name for himself 30 years ago, quickly settling a long-running dispute between makers of the defolian agent orange and a quarter of a million vietnam veterans. he's served as the government's pay czar determining compensation paid out to companies. and victims of the aurora, colorado and virginia tech shooters, boston marathon bombings and families of 9/11. during his three years in this role, feinberg's empathetic and practical approach to a seemingly unsolved problem brought him praise. >> he'll have meetings, try to reach out. he does it in a way that's fundamentally therapeutic. he's not someone who uses a mathematical formula. he doesn't attempt complete decision >> reporter: he isn't above reproach as overseer for victims fund for b.p.'s deep water horizon oil spill, the critics krit said he held his company's interests above theirs in a statement feinberg said he'd draw on past experience. experience that's focused on answering the thorny question of what a life is wo

feinberg alswants a say on any perkvalued at over $25,000. today'developments come just days after feinberg manded that bank ofmerica ceo ken lewis forgo s salary and bonus fothis year. lewis agreed paul: meanwhile president obamwants to make more money available to small busesses. the ea is to solve the credit crunch hampering main reet entrepreneur the ite house will earmark more fds in the so-called tarp program for small bas, lending the money at 3% interest rate. the administtion also wants coress to beef up to $5- million the money e small busine administration can loan on real estatend other assets. >> susie: but all banks say thosmeasures may not be enough to bst lending to small businesses. white use initiative, darren gersh spoke with jed bernstein, a top economic adviser in the obama administration. >> reporter: somof the small banks and lent, out there are wonding why it took the administration 7 mths to come up with ts program. >> wel i think it's importt to recognize that the recovery act, which psed last februy, had man imrtant

nbr'stephanie dhue spoke with feinberg earlier tod. what's the goal of these restrictions? >> the goal of the restrictions is to re in kpegs excessive pay. and ulmately the real goa of whole prram is to get the seven companies to repay e taxpayer. bank of america just did it a coup of days ago-$45 billion. backo the taxpayer. they're out from under my jurisdiction. >> reporter: we stue goldman sachs put some restrukt-- reructure its bonus plan. do you expect more companies to follow suit? >> i hope that wl be the case and i think it will. i think th restrictions the principles thahave guide r desion at treasury, not so much ca bonuses tied to performance, bonuses in long-term stock, whi can't be sold for a number of years, the principles are precisely what goldman announce >> reporter: someay that's really not all that much change. i mean, they're stilmaking a n of money. is it real change o just kind of window dressing >>ou'll have to ask goldman her ands. i ca only say that in so far as my artulation of princles, governing compension have been adopbide goldman, i consider

kenneth feinberg, the attorney responsible for managing b.p.'s $20 billion claims fund, shared his plan for distributing cash to small business owners affected by the spill. feinberg says that anyone who feels they deserve a claim should file one. his goal is to maximize the number of people who will take a check from the fund and give up their right to sue b.p. now, feinberg said suing b.p. would likely take more time and money than it is worth. he also made it clear that he will stay independent from both the administration and b.p. throughout the claims process. >> bipartisan, apolitical, i am determined to pay every eligible claim, pay it as promptly as i can, get the money out. >> susie: feinberg also said for those filing eligible claims, there will be a quick turnaround involving lump sums rather than monthly checks. and those claims will require valid proof and be based on the individual victim's state laws. just seems like investors can't get into the buying mood. >> why should the end of the quarter or the ed end of the first half of t

feinberg has 60 days taccept or reject e proposals. joining me now wh his thoughts on the hotopic of executive compensaon is charles elson. is a professor at the university of delaware and director of thweinberg center for corporate governance. lcome to the program. >> gd evening. good tbe with you. >> suzanne: you don like this ideaf the pay czar? tell me why you feel that way? >> you hav totart with the term itself. czar isn't exaly a u. buness term. it connos somethingomeone fr the top dow telling folks how they should pay people. really up to the corporaon, it stts with the shareholders and the boa. you start with that sondly and moremportantly, i think he's an aolutely impossible sition. if he were to approve th pay as prented, then he'll take an awl lot of flack as will the blic in ter of the rat approved. if h turns down the reques and wers the amounts and the coanies don't perform, thell ble him saying the taxpayers have losbecause he didn't apove a comtitive pay structe. either way, it's -- i thi -- a bad idea. >> suzanne: con

feinberg testified before a house panel on executive pay today. he told lawmakers he wants to stay out of the business of regulating private companies but says those seven companies are a different matter. >> these seven companies are owned by the taxpayer, and the taxpayers as creditors are asking these companies to rein compensation and come up with compensation packages that will maximize the likelihood, first and foremost, that the taxpayers will get their money back. >> paul: next on feinberg's to do list: the fate of $200- million in bonuses set to be paid to top brass at troubled insurer american international group. >> susie: also out of washington, tomorrow morning we'll learn more about how house democrats plan to reform healthcare. the measure reportedly will contain a compromise on a public insurance option a factor that's been controversial on the senate side. we'll bring you details tomorrow night. >> paul: wall street headed lower this morning as doubts about the strength of the economic recovery grew more serious. stocks were under

today kenneth feinberg, the lawyer hired by gm to award payments to crash victims released his first report showing that claims and fatalities are much higher thap the automaker had determined. phil lebeau has more. >> after looking at hundreds of claims and meeting with families of those injured or killed in faulty gm vehicles, attorney ken feinberg is close to awarding millions of dollars to many of the victims. so far the fund has received 445 claim applications including 125 on behalf of those killed in gm models. of that, 31 have been deemed eligible for payments including 19 involving fatalities. >> clearly the number will go up. it's speculation as to how high it will go. but clearly, based on the number of claims that have already been found eligible and the number that are in the queue that we're looking at, the number will continue to rise. >> for months dpr s gm claimed 3 deaths were linked to accidents involving 2.6 million cars with defective ignition switches. even as lawyers and safety advocates have warned that there were far more people killed. >> gm simply was flat

s $20 billion spill fund, kenneth feinberg, is responding to critics. in a court filing, he says the process used to compensate victims has been "nothing short of extraordinary". feinberg says his efforts have exceeded what's required by federal law. but critics say the process is mired in red tape and delays. those unhappy with the fund's progress range from gulf area residents and businesses to lawmakers and b.p. itself. >> susie: with all the talk of budget numbers and spending cuts in washington, d.c., tonight's commentator is scoffing at both sides of the aisle. he's allan sloan, senior editor at large at "fortune." >> are you getting tired of all the talk about the federal budget? heaven knows, i am, and the debate has barely started. i'm no budget genius, but i know enough to know that most of what were seeing and reading and hearing is nonsense. the obama people pretend to be doing serious budget cutting. but of course, they aren't. the republicans are whacking away at the current budget to cut things they don't like, such as pell grants to help

feinberg's already running b.p.'s $20 billion compensation fund, he says figuring out tourism-related damage claims won't be easy. >> proximity is going to be the problem. how far from the beach does a steakhouse that's lost 30% of its business... what constitutes an eligible tourism claim?" >> susie: and it doesn't appear the tourism situation on the gulf coast is improving. when n.b.r.'s jeff yastine visited the region last month, tourism boosters in places like panama city, florida were still hoping for the best. now, one resort operator told him the outlook for august is "grim," and that visitors who do decide to come usually book at the last moment, demanding deep discounts. >> tom: here are the stories in tonight's n.b.r. newswheel: fresh worries about the consumer had stocks little changed. the dow rose 12 points, the nasdaq fell eight points and the s&p 500 was off a point. volume direction, compared to yesterday, was split. big board volume rose while the pace of trading on nasdaq fell. the conference board'

no comment yet from feinberg. any money left in the fund goes back to b.p. still ahead, will sunday's big game be the last for a while? what a potential n.f.l. lockout could mean for billions in stadium i.o.u.s, their investors and communities. >> suzanne: remember the flash crash from last may, when the dow fell 700 points in minutes before rebounding? a member of the panel trying to figure out how to avoid another one said today he expects recommendations to be made by february 18. nobel prize-winning economist robert engle said the group had not yet decided on its final suggestions for regulators. but, he believes the focus should be on improving liquidity in the stock market. >> the flash crash was fundamentally the result of liquidity evaporating and there are a lot of reasons why it evaporated. so if we can increase the incentives to brokers and traders to supply liquidity, it would reduce the probability that you'll have another even like this, but it won't reduce it to zero. >> suzanne: engle would like to see the exchanges use a peak load pricing mo

our darren gersh recently talked with ken feinberg, the administrator of b.p.'s $20 billion fund. darren began by asking if there's a problem with the way the fund pays out claims. >> well, there's a problem. first of all, one problem is the sheer magnitude of the number of claims. we have received in the past nine months 800,000 claims in just ninth months for all over 50 states. so there may be some businesses that rebate getting the type of tailored, individualized treatment they expect. that's a mistake. we try to minimize the number of those. we have taken great steps in the past two months to solve that problem. >> reporter: i know you don't comment on specific claims, but can you give us sort of an example of why somebody who might submit a $500,000 claim would get $4,000 and not much explapgz about that? why might that happen? >> it will happen. if the $500,000 claim ant provides a tax return that shows they reported $4,000 worth of profit in income. i mean, the big problem i've got in the gulf, between the objective of the claimant in some cases asking for $500,000 and on

and ken feinberg, the man overseeing b.p.'s huge compensation fund, says fishermen and others with claims would be, in his words, crazy to by-pass the fund and sue. feinberg says he'll be more generous than any court, and claimants won't face court delays. >> susie: coming up on the program, stocks too volatile? treasury yields got you down? how about lending money to your favorite company instead? we look at why corporate debt offerings are jumping. >> tom: more now on the debate over extending unemployment benefits. if kwong congress he kays this this week, it would be the sixth time since the recession began that unemployment payments have been extended. over the past two years, looking at everyone without a job, the percent of people who have been jobless for six months or more has jumped from under 20% to almost half. jeff miron is a senior fellow at the cato institute. christian weller is a senior fellow at the center for american progress. welcome. >> thank you. >> tom: let's begin what the department of labor says abou

feinberg's been under fire for months about giving out too little money to spill victims. and still ahead, etfs versus mutual funds-- which is the right investment vehicle for you? more protests today in many middle eastern nations, from bahrain to iran to yemen. and workers along the suez canal went on strike. despite that turmoil, here in the u.s., all three of the major stock indexes closed at their highest levels in more than two years. so what's pushing stocks higher? and what does the unrest in the middle east mean for investors? joining us now, nick colas, chief market strategist at convergex group. hi, nick, thanks for joining us. >> sure thing. >> susie: so these recent eventings in the middle east look like a huge contagion and yet here in the u.s. we have a solid stock market rally. why is that? >> well, because so far the unrest we've seen in the middle east hasn't really impacted oil prices and that's really the critical factor for thinking about political unrest in that area of the world. it does in fact impact oil prices, oil supply, it's a critical area for