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House passes bill taxing AIG and other bonuses
(Agencies)
Updated: 2009-03-20 07:49

WASHINGTON -- Denouncing a "squandering of the people's money," lawmakers voted decisively Thursday to impose a 90 percent tax on millions of dollars in employee bonuses paid by troubled insurance giant AIG and other bailed-out companies.

House Speaker Nancy Pelosi of Calif. gestures during a news conference, Thursday, March 19, 2009, on Capitol Hill in Washington. [Agencies] 

The House vote was 328-93. Similar legislation has been introduced in the Senate and President Barack Obama quickly signaled general support for the concept.

"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," the president said in a statement.

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House Speaker Nancy Pelosi, D-Calif, told colleagues, "We want our money back now for the taxpayers. It isn't that complicated."

The outcome may not have been complicated. But the lopsided vote failed to reflect the contentious political battle that preceded it.

Republicans took Democrats to task for rushing to tax AIG bonuses worth an estimated $165 million after the majority party stripped from last month's economic stimulus bill a provision that could have banned such payouts.

"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 House Republican Leader John Boehner of Ohio.

He voted "no," but 85 fellow Republicans joined 243 Democrats in voting "yes." It was opposed by six Democrats and 87 Republicans.

The bill would impose a 90 percent tax on bonuses given to employees with family incomes above $250,000 at American International Group and other companies that have received at least $5 billion in government bailout money. It would apply to any such bonuses issued since Dec. 31.

The House vote, after just 40 minutes of debate, showed how quickly Congress can act when the political will is there.

It was only this past weekend that the bailed-out insurance giant paid bonuses totaling $165 million to employees, including traders in the Financial Products unit that nearly brought about AIG's collapse.

AIG has received $182.5 billion in federal bailout money and is now 80 percent government owned.

Disclosure of the bonuses touched off a national firestorm that both the Obama administration and Congress have scurried to contain.

In a statement issued by the White House late Thursday, Obama said the House 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."

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