Everybody is appalled when executives get huge salaries for failing. The only thing worse is having pay of people in the private sector set by the federal government.  Senator Blanche Lincoln, in trouble with the folks back home in Arkansas, is dabbling in federal pay caps for insurance company executives today. It’s a bad precedent—and even worse because the amendment doesn’t do anything much that’s not already in the disastrous bill itself.

Yahoo News sums it up:

Democratic leaders were giving the spotlight Saturday to Sen. Blanche Lincoln, D-Ark. — a key moderate with a difficult re-election next year — to propose an amendment that would limit insurance executives’ tax deductible salaries to the same amount the U.S. president makes — currently $400,000.

The bill already includes a limit of $500,000 added by Lincoln earlier, so the new amendment doesn’t represent a major change, though it does add a provision directing the expected $650 million in revenue to the Medicare trust fund.

It also gives Lincoln something to brag about as her poll numbers sag back home.

“Without this change every Arkansas taxpayer and every U.S. taxpayer subsidizes these big insurance executives’ unlimited salaries and compensation packages at the same time the companies are denying coverage to hardworking Americans,” Lincoln said.

Sure, Ms. Lincoln needs to do some grandstanding if she is to find a way to justify a vote that’s not going to go over all that well in Arkansas, but this is a terrible precedent and she should know it. What citizens of Arkansas should fear is senators who want to cap pay in the private sector. Or will insurance companies even really function in the private sector if this bill becomes reality?