Congress, angry over the $165 million in bonuses paid to American International Group Inc. (AIG) executives, approved a bill — 328-93 — that would impose a punitive 90 percent tax on bonuses paid by AIG.
The bill passed Thursday by the House would apply to bonuses of people making more than $250,000 a year, and would apply only to payments from companies getting more than $5 billion from the federal government through the $700 billion Troubled Asset Relief Program approved in October.
“Once again the Speaker (Nanci Pelosi) and the Democrats in charge of the House gave us a take-it-or-leave-it scenario,” Schmidt spokesman Bruce Pfaff said. “They wouldn't allow a Republican alternative to come to the floor. They wouldn't allow amendments to their bill. And it was a difficult issue for the congresswoman, given that this is a tax — but essentially Congresswoman Schmidt was forced to take a stand on behalf of the taxpayers who have spent billions and billions of dollars trying to shore up our economy and our financial system.”
Pfaff said the money from the TARP fund was meant to be used to, “get the lending pipeline unfrozen, so that small businesses could once again get the money they need to keep, retain and build jobs.”
For that reason, Pfaff said, Schmidt believes the $165 million in TARP money should not have been used for executive bonuses.
Republicans joining Schmidt in voting for the bill were Rep. Patrick Tiberi (OH-12) and Rep. Michael Turner (OH-3). All Ohio Democratic representatives, including Rep. Charlie Wilson (OH-6) voted for the measure.
“These outrageous executive bonuses at AIG are a clear mistake, but today, we took a bold step to fix the problem and protect taxpayer money,” Wilson said. “By passing this legislation today we are sending a clear signal that the Democrats, Republicans and American taxpayers will not reward greed and that the buck stops here.”
Meanwhile, Treasury Secretary Timothy Geithner acknowledged in an interview Thursday with CNN that he knew recently passed stimulus legislation included a loophole that could allow AIG to keep its controversial bonuses.
Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee, also came under fire for language in the stimulus bill that restricted bonuses and golden parachutes, but allowed AIG to retain its particular bonuses because of a “grandfather” clause.
Dodd tried to deflect the blame Wednesday onto the White House, saying in an interview that he agreed to change the final version of the bill at Treasury Department's request.
FRANK LEWIS may be reached at (740) 353-3101 Ext. 232.