The chairman of the U.S. panel that oversees the $700-billion (U.S.) federal bailout fund said Thursday the Obama administration is insisting on slashing the salaries of executives of companies that took money from the government.

Appearing on a nationally broadcast interview, Elizabeth Warren said reports of pending slashes in executive salaries are “real.”

Asked on CBS's “The Early Show” whether reports of the rollback amounted to a public relations stunt, Warren, who heads the Targeted Asset Relief Program's (TARP) oversight committee, replied, “It's real in the sense that it says, ‘Guys, you have to understand that you can't party on like it's 2007. If you're going to take taxpayer dollars, then the game has to change. In that sense it's real.'”

Warren's appearance came a day after it was disclosed that the U.S. Treasury Department is expected in the next few days to order companies that received huge government bailouts last year to slash the base salaries of their top executives by an average of 90 per cent and cut their total compensation in half.

A person familiar with the matter told the Associated Press that the cuts apply to the 25 highest paid executives at the seven companies that received the most assistance. The person spoke on condition of anonymity because the decision has not been announced. Smaller companies and those that have repaid the bailout money, including Goldman Sachs Inc. and JPMorgan Chase & Co., are not affected.