03-19-2009, 10:47 PM
Thu Mar 19, 2009 3:37pm EDT
* House bill taxes bonuses at 90 pct for some AIG staff
* Senate may take up other version to recoup AIG bonuses (Adds details, comments, byline)
By Jeremy Pelofsky and Susan Cornwell
WASHINGTON, March 19 (Reuters) - Moving with unusual speed, the Democratic-controlled U.S. House of Representatives on Thursday passed legislation to recoup most of the $165 million in retention bonuses paid to American International Group Inc (AIG.N) employees.
Responding quickly to public outrage over the bonuses after the giant insurer received government bailouts of up to $180 billion, the House voted 328-93 to approve a 90 percent tax on bonuses for some executives at companies getting federal aid.
The tax would apply to executives with incomes over $250,000 who worked for companies that got at least $5 billion in government aid. That could ensnare others getting federal help, such as mortgage financing company Fannie Mae (FNM.N).
"The whole idea that they should be rewarded millions of dollars is repugnant to everything that decent people believe in," said Representative Charlie Rangel, the Democratic chairman of the tax-writing Ways and Means Committee.
Fury over the bonuses at AIG and other large companies that have received federal bailout money threatens to undermine President Barack Obama's efforts to solve the financial crisis and pull the economy out of a deep recession.
The Senate is expected to consider a different plan to recoup the bonuses, potentially a 70 percent excise tax.
But some Republicans are pushing for hearings before drafting and voting on legislation, raising questions about whether legislation will pass quickly.
"Until we have hearings and we understand all this, we are not going to know what kind of fix to implement," Senate Republican Whip Jon Kyl told reporters.
AIG Chief Executive Edward Liddy told Congress on Wednesday he has asked employees to give back at least half of their retention bonuses and that some had already given back their entire bonuses.
But he said the payouts were necessary to retain top employees with specialized knowledge to dispose of $2.7 trillion in complex securities that ended up dragging the insurer to the brink of collapse last year.
Angry House Republicans blamed Democrats who control Congress and the White House, accusing them of allowing the bonuses to be paid in the first place. Some questioned whether the legislation approved would survive court challenges. (Additional reporting by Thomas Ferraro; Editing by John O'Callaghan)
http://www.reuters.com/article/americasR...3520090319
* House bill taxes bonuses at 90 pct for some AIG staff
* Senate may take up other version to recoup AIG bonuses (Adds details, comments, byline)
By Jeremy Pelofsky and Susan Cornwell
WASHINGTON, March 19 (Reuters) - Moving with unusual speed, the Democratic-controlled U.S. House of Representatives on Thursday passed legislation to recoup most of the $165 million in retention bonuses paid to American International Group Inc (AIG.N) employees.
Responding quickly to public outrage over the bonuses after the giant insurer received government bailouts of up to $180 billion, the House voted 328-93 to approve a 90 percent tax on bonuses for some executives at companies getting federal aid.
The tax would apply to executives with incomes over $250,000 who worked for companies that got at least $5 billion in government aid. That could ensnare others getting federal help, such as mortgage financing company Fannie Mae (FNM.N).
"The whole idea that they should be rewarded millions of dollars is repugnant to everything that decent people believe in," said Representative Charlie Rangel, the Democratic chairman of the tax-writing Ways and Means Committee.
Fury over the bonuses at AIG and other large companies that have received federal bailout money threatens to undermine President Barack Obama's efforts to solve the financial crisis and pull the economy out of a deep recession.
The Senate is expected to consider a different plan to recoup the bonuses, potentially a 70 percent excise tax.
But some Republicans are pushing for hearings before drafting and voting on legislation, raising questions about whether legislation will pass quickly.
"Until we have hearings and we understand all this, we are not going to know what kind of fix to implement," Senate Republican Whip Jon Kyl told reporters.
AIG Chief Executive Edward Liddy told Congress on Wednesday he has asked employees to give back at least half of their retention bonuses and that some had already given back their entire bonuses.
But he said the payouts were necessary to retain top employees with specialized knowledge to dispose of $2.7 trillion in complex securities that ended up dragging the insurer to the brink of collapse last year.
Angry House Republicans blamed Democrats who control Congress and the White House, accusing them of allowing the bonuses to be paid in the first place. Some questioned whether the legislation approved would survive court challenges. (Additional reporting by Thomas Ferraro; Editing by John O'Callaghan)
http://www.reuters.com/article/americasR...3520090319
