House debates bill taxing AIG and other bonuses
WASHINGTON — Democrats pressed for quick action today on a bill to slap punishing taxes on big employee bonuses from firms bailed out by taxpayers. Republicans called it a legally questionable ploy to paper over Obama administration missteps.
"The American people demand protection and that's what we're doing today," said Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee.
But Minority Leader John Boehner, R-Ohio, called the bill "a political circus" diverting attention from why the administration hadn't done more to block the bonuses before they were paid.
The bonuses, totaling $165 million, were paid to employees of troubled insurer American International Group over the weekend, including to traders in the unit that nearly brought about the company's collapse.
Democratic leaders rushed the bill to the floor under a procedure that requires a two-thirds majority for passage. The numerous Republican complaints about the measure during today's debate raised questions on whether it would pass.
Rep. Mike Pence, R-Ind., said, "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."
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 Rangel.
Rangel said the bill would apply to mortgage giants Fannie Mae and Freddie Mac, among others, while excluding community banks and other smaller companies that have received less bailout money.
