US House passes 90 pct tax on bailout bonuses

Swept up by a wave of populist economic anger, the US House of Representatives overwhelmingly voted Thursday to slap a 90 percent tax on bonuses for top executives at bailed-out firms like AIG.

The Democratic majority rallied a large swath of President Barack Obama's Republican critics as lawmakers voted 328-93 for the legislation as the outcry over the payouts raised the heat on Treasury Secretary Timothy Geithner.

"We want our money back, and we want our money back now," Democratic House Speaker Nancy Pelosi said during the often bitter debate. "Here's one way to get it."

The 90 percent tax, written with American International Group in mind, would apply to employees whose total annual pay exceeded 250,000 dollars at firms that received more than five billion dollars in government rescue funds.

"Today's vote rightly reflects the outrage that so many feel over the lavish bonuses that AIG provided its employees at the expense of the taxpayers who have kept this failed company afloat," Obama said in a statement.

The Senate could as early as Friday take up its own bonus-hunting measure, which could impose excise taxes of up to 70 percent, but efforts to act quickly on the House bill hit a snag as Republicans demanded hearings before any vote.

The two chambers would need to reconcile any differences before Obama can sign the measure into law.

"I look forward to receiving a final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated," Obama said during a trip to California.

AIG, alive only thanks to 170 billion dollars in government rescue money, dished out 165 million dollars in bonuses to top executives, including some in the division blamed for putting the once mighty insurer on life support.

Under fire for not blocking the payouts before handing over 30 billion dollars in aid this month, Geithner said he took "full responsibility" but pleaded that he learned too late "the full scale" of the fiasco.

"It's my responsibility. I was in a position where I didn't know about those sooner, I take full responsibility for that," he told CNN television.

His comments came as Republicans blamed Democrats for diluting a measure that would have blocked the bonuses and redoubled their charges that Geithner knew, or should have known, that the awards were coming and therefore could have stopped them.

"This political circus that's going on here today with this bill is not getting to the bottom of the questions of who knew what, and when did they know it," said Republican Minority Leader John Boehner.

Aides on both sides said the November 2010 mid-term elections were not far from lawmakers' minds, and that pessimistic forecasts made it more likely that kitchen-table issues would place high on voters' agendas.

In a symbolic warning to the White House, House Democrats failed to win enough backing to pass a non-binding resolution commending Obama's handling of AIG, a newly potent political symbol of reckless greed.

Meanwhile, the US government's chief overseer of rescue funds known as the Troubled Asset Relief Program TARP announced an investigation into the AIG bonuses, including what role the US Treasury played in approving the payments.

Neil Barofsky, who took over in December as the TARP special inspector-general, promised lawmakers he would "act aggressively to recover the taxpayer's money" if wrongdoing were found at AIG.

The insurance giant was rescued because the US government believed its intricate web of ties with banks worldwide posed an imminent risk of financial collapse not just for the United States but globally.





Curry