Thursday, March 19, 2009

House Dems - AIG Can't Keep Bonuses

What a difference a day makes. Twenty four little hours and the House Democrats changed their collective mind and now demand that AIG executives either return the bonus money or the feds will tax the bonus at rate of 90%.

What the Dems voted down yesterday was the Republican sponsored HR 1577 - The AIG Bonus Payment Bill. Here's what it would have done:

Section 1: The Secretary of the Treasury shall, notwithstanding any other provision of law, implement a plan within the next two weeks to recoup or stay the payment of AIG bonuses.

Section 2: No additional funds may be provided to AIG until the bonuses are returned.

Section 3: Any future bonus payments, of any kind, by TARP fund recipients who have not within two weeks of enactment of the bill repaid the government in full, must be approved in advance by Treasury.

Section 4: Any future contractual obligations to make bonus payments of any kind entered into by TARP fund recipients who have not within two weeks of enactment of the bill repaid the government in full must be approved in advance by Treasury.
With blitzkrieg speed, the House of Representatives voted 328-93 to approve a new tax on executive bonuses.

The bill would levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.

"We figured that the local and state governments would take care of the other 10 percent," said Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee.Rangel.
Corporate tax attorney, Robert Willens, said there is precedents aplenty "for levying punitive taxes on behavior that lawmakers find objectionable." It can even be done ex post facto which means an act can be declared illegal after it's happened and be applied retroactively. Never mind the Constitution forbids such laws. Willens said, "You can write very narrowly tailored laws. And they can do it for bonuses already paid."

House Speaker Nancy Pelosi said, "We want our money back and we want our money back now for the taxpayers."

"The American people demand protection and that's what we're doing today," said Rep. Charles Rangel.

Rep. Mike Pence, R-Ind, said, "The Democratic bill brought to the floor today is constitutionally questionable. It's obviously a transparent attempt to divert attention away from the truth that Democrats in Congress and this administration made these bonus payments possible."

Obama said, "Now, for the Tar Heels that are watching, I picked you all last year — you let me down. This year, don't embarrass me in front of the nation, all right? I'm counting on you. I still got those sneakers you guys gave me."

I'm heartened that the White House resident can focus on what's important and not be distracted by the people's business. Otherwise, he could really screw things up.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

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