House votes to levy heavy tax on bonuses of AIG, others
WASHINGTON -- The House moved swiftly to quell public furor over bonuses to AIG executives Thursday, voting by a wide margin to heavily tax the money awarded to employees of the insurer and other companies bailed out by the government.
The 328-93 vote imposes a 90% tax on any bonuses given to employees with family incomes of more than $250,000 at firms that received more than $5 billion in bailout money.
Rep. Charles Rangel, the top Democrat on the House tax-writing committee, said the bill was a "red light" to companies receiving taxpayer aid. "Don't dare try to take a bonus and get away with it," he said after the vote.
President Obama said the House vote "rightly reflects that outrage that so many feel."
The bipartisan uproar over the bonuses broke down into finger-pointing between Republicans and Democrats that threatens to dominate Congress in the coming days as the Senate weighs its version of the bill.
Republicans assailed Obama and Democrats in Congress for not aggressively moving to block the $165 million paid out to AIG workers last week. The firm has received access to $180 billion in federal funds since September.
House Minority Leader John Boehner, R-Ohio, termed the House bill a "political circus." Sen. Lamar Alexander, R-Tenn., and others mocked Obama's Thursday appearance on NBC's Tonight Show with Jay Leno.
Despite the heated debate Thursday, nearly half of the House Republicans defied top GOP leaders to vote for the tax.
Much of Thursday's feuding centered on Sen. Chris Dodd, D-Conn., who chairs the Senate's banking panel. He inserted language in a recently passed stimulus bill that shielded the AIG bonuses.
Dodd said the administration insisted he change his proposal — aimed at limiting executive pay, including bonuses — so that it would only apply to future agreements. That cleared the way for the AIG payouts.
In a CNN interview, Treasury Secretary Timothy Geithner said the administration was worried about possible legal challenges.
Republicans, such as Arizona Sen. Jon Kyl, said they would work to slow action on a Senate tax bill to allow a more thorough review. A bipartisan Senate bill, introduced late Thursday, would impose a 35% excise tax on companies paying bonuses and a 35% tax on employees receiving them. It would apply to any company that received more than $100 million in federal aid.
Senate Majority Leader Harry Reid, D-Nev., said he was confident that the differences in the House and Senate bills could be reconciled. The Senate could vote on the bill next week, he said.
Meanwhile, New York State Attorney General Andrew Cuomo said he has the names of AIG employees who received bonuses and will assess safety concerns before revealing them.
Contributing: Associated Press