House Passes Bailout Bonus Tax

WASHINGTON–The House voted today to impose 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.

On a 328 to 93 vote the House passed legislation that was drafted in reaction to public and congressional anger over $165 million in bonuses paid to American International Group executives last week.

"The people have said 'no,' " Rep. Earl Pomeroy, D-N.D., shouted on the House floor. " In fact, they said 'hell no, and give us our money back.' "

"Have the recipients of these checks no shame at all?" Mr. Pomeroy continued. Summing up his personal view of the so-far anonymous A.I.G. executives, he said: "You are disgraced professional losers. And by the way, give us our money back."

Rep. Pomeroy is a former North Dakota insurance commissioner.

Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee, which approved the measure yesterday, said then, "We figured that the local and state governments would take care of the other 10 percent," explaining how the committee arrived at the 90 percent figure.

It would apply to bonuses paid since Jan. 1 by AIG or any other company accepting more than $5 billion in bailout money. The bonuses were paid to officials of its troubled Financial Products group, whose activities caused multi-billon dollar losses that led the company to seek a financial rescue by the government.

AIG Chief Executive Officer and Chairman Edward Liddy told a panel of the House Financial Services Committee yesterday that the financial products group was the primary reason AIG had to seek a federal bailout last Sept. 16.

During the hearing, Mr. Liddy said some recipients of the payments had already returned the money, and he was asking others to do so.

This afternoon New York Attorney General Andrew Cuomo obtained a list of AIG FP employees who received retention payouts. Before he received that material he had vowed to take AIG to court if it failed to comply by the end of the day with his subpoena demanding who was paid $165 million in controversial bonuses last week.

Mr. Cuomo said he wanted a list of 418 individuals who received retention bonuses in its AIG Financial Products unit and copies of the contracts underlying the bonuses.