CEDAR FALLS - The public was in the mood to talk bailouts, bonuses and the economy with Sen. Charles Grassley on Tuesday.

The Republican from New Hartford spoke to Cedar Valley Young Professionals at the University of Northern Iowa.

When asked if he supported salary caps for private businesses, Grassley said he would only do so if they received taxpayer money.

"If you're sucking on the taxpayer, we've got some legitimate business protecting the taxpayer," he said.

In his introduction, Grassley was billed as someone who "tells it like it is," which prompted the senator to say in his initial remarks, "I'm not really advocating suicide for anybody."

Last month, Grassley made national news when he suggested executives of American International Group Inc., the insurance giant receiving government bailout money, follow a Japanese tradition and apologize for mismanagement or commit suicide.

Asked about the current tax rate, he said government should follow the Hoover rule, a reference to the President Herbert Hoover, a man many blame for the Great Depression: "If Hoover did it, don't do it." Even President Barack Obama, "as liberal as he is," Grassley said, recognizes that he should not raise tax rates in a recession.

Several people asked why there was no public outrage over bonuses received by the quasi-governmental mortgage lenders Fannie Mae and Freddy Mac, companies that played a part in creating the mortgage crisis.

Grassley said Congress is restricted in what it can do to control bonuses already paid out and compared it to "closing the barn door after the horse has already been let out." He said politicians can try to publicly shame companies into giving bonuses back, which they did in the case of AIG. Another option is to levy a special tax, which the Obama administration indicated it is hesitant to do after initial support of the idea.

Grassley, who supported the first bailout bill in October, said the poor results since then have convinced him that the smart thing is to stop bailing out companies and let them go bankrupt.

"Not seeing results from the first bailout has convinced me bankruptcy is the way to go," he said.

Contact Jens Manuel Krogstad at (319) 291-1580 or jens.krogstad@wcfcourier.com.