House feigns outrage

Published 8:51 am Monday, March 23, 2009

By Staff
It was widely reported last week that insurance giant AIG used taxpayer dollars to dole out $165 million in executive bonuses in this economic crisis.
While it is both appalling and dismaying that these bonuses were written with the American people’s checkbook – and the American people deserve a full refund – bills brought to the House floor last week were a shameless attempt to focus attention regarding the AIG executive bonuses. 
While the payment of the bonuses is obviously outrageous, our focus should be on the real issue: how were these bonuses allowed to be issued in the first place?
Feigning outrage, House Democratic leaders brought a measure to the floor that should put a chill down every American’s spine – to cover its tracks, Congress will send the strong arm of the IRS to regulate the pay of private citizens.
This bill would apply to bonuses received in 2009 and beyond to employees of companies receiving more than $5 billion in federal bailout funds, meaning Bank of America, Wells Fargo & Co., Citigroup Inc., Fannie Mae and Freddie Mac would also be affected.
These bonuses would not be subject to the regular federal income tax but instead, subject to a 90 percent federal tax.
While it is puzzling that this legislation was only seeking to recoup 90 percent of the bonuses – and not 100 percent – this legislation raises serious Constitutional concerns.
Imposing too high a tax rate risks the tax being confiscatory – a taking without due process.  Retroactive tax hikes may violate the Constitution’s prohibition of ex post facto laws, and targeting such a narrow group raises serious, additional Constitutional questions.
These facts alone are reason enough to vote against the bill, but the bottom line is that these bonuses should never have been issued.
Last week, it slowly came to light that a Treasury Department official asked Senate Banking Committee Chairman Chris Dodd, D-Conn., to remove barriers from the trillion-dollar “stimulus” bill – barriers that would have prohibited these bonuses from going to AIG executives.
This language did not exist in either the House or Senate versions of the “stimulus.”  And, no one will come forward and say who in the Obama Admin-istration pressed Democra-tic leaders to allow the AIG executive bonuses. 
I opposed the trillion-dollar “stimulus” bill because it was written in secret and voted on before anyone had an opportunity to read the 1,100 page bill. 
The inconvenient fact is if we had taken the time for this bill to be considered in committee – or at the very least allowed Members and the American people to know what was in the bill – then perhaps the Democra-tic leadership would not have been in the impossible position of being outraged by their own actions.
Jo Bonner serves Escambia County
in the U.S. House of