Weekly News via Email
   Set as homepage | Add to favorites | Customer Service | Subscribe Now | Place an Ad | Contact Us | Sitemap Sunday, 01.21.2018
News Archive
Su Mo Tu We Th Fr Sa
 1  2  3  4  5  6  7
 8  9  10  11  12  13  14
 15  16  17  18  19  20  21
 22  23  24  25  26  27  28
 29  30  31
Online Extras
Site Services
Around Bend
Outdoor Fun
Travel Info
Shop Local

Members Of

Poll: Today's Live Poll
Email to a friend | Print this | PDF version | Comments (0 posted) 
  Blogger |   del.icio.us |   digg |   newsvine

Mar 27,2009
Congress jumps on AIG bonuses to deflect blame
by The Detroit News

Americans are upset and angry at the state of the economy and the mismanagement by some financial firms that have contributed to their economic woes. They should be. But Congress has had a role in that mismanagement, and it is furiously trying to deflect attention from that fact with its outrage at bonuses paid to some employees of insurance giant AIG.

Seeing a mob with pitchforks coming its way, some members of Congress are pointing at American International Group bonus recipients and yelling, "yeah, hang 'em!" That's what's behind the House's move last week to tax away the bonuses at 90 percent and the demand made by Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman, for a list of the bonus recipients.

AIG is the recipient of about $170 billion in federal bailout funds, and some of its employees have received bonuses totaling about $220 million. The bonuses are indefensible, and the taxpayers have a right to be angry that their money was used so shoddily.

But Congress has no standing to point fingers. It is complicit in the bonus payouts.

AIG Chairman Edward M. Liddy was grilled in a congressional hearing last week as part of Congress' feigned outrage. But Liddy has only been with the company since last September. He came out of retirement to take the helm of AIG, which has insured billions of dollars in mortgage-backed securities held by banks all over the world, at an annual salary of $1. He had nothing to do with the bonuses, which were part of some employees' contracts.

But here's the dirty little secret for Congress: Provisions in the federal stimulus bill limiting pay and bonuses for firms receiving federal bailout aid were, according to Senate Banking Committee Chairman Christopher Dodd of Connecticut, changed by Dodd at the request of Treasury Department officials. That made the bonuses possible. Treasury Secretary Tim Geithner has reportedly confirmed Dodd's version of events.

Dodd told CBS News that at the time he didn't make the connection between this request and the AIG bailout. And both houses of Congress ultimately voted the bill into law. Dodd's explanation stretches credibility. But if he's telling the truth, he at the least is guilty of gross negligence of his duty to know the consequence of a measure before he approves it.

While Congress is getting plenty of bang out of its attempt to tax the bonuses, members know that they don't have the legal right to do so. Taxing the proceeds of legal contracts after the fact smacks of a bill of attainder — or the singling out of a particular people or groups of people for punishment. Laws that make legal actions retroactively illegal are also unconstitutional.

Whether this bill exactly fits the constitutional bans is a matter of contention, but it is not to the credit of U.S. Rep. Gary Peters, D-Mich., that he had a hand in legislation that is constitutionally suspect and intended only to pander to the public's passions.

Of course the bonuses are unwise and unfair, and of course they should be returned. Liddy has already said he will try to get most of the money back to the Treasury.

But that doesn't deal with the issue of Congress' laxity in overseeing how taxpayer money is being spent. Had our representatives been more vigilant in the first place, the bonus checks would have never been written.

For Congress to try now to lead the angry mob is hypocritical. They'd make a far better target.

Reprinted From The Detroit News. Distributed By Creators Syndicate Inc.

1015 times read

Related news
Congress, overtax thyself by Debra_J_Saunders posted on Mar 27,2009

AIG's Liddy to be on House hot seat by UPI posted on Mar 18,2009

A Lewinsky moment by The St. Louis Post-Dispatch posted on Mar 20,2009

Bailouts and bonuses by The Indianapolis Star posted on Mar 20,2009

Treasury's knowledge of AIG bonuses probed by UPI posted on Mar 19,2009

Did you enjoy this article? Rating: 5.00Rating: 5.00Rating: 5.00Rating: 5.00Rating: 5.00 (total 6 votes)

Market Information
Breaking News
Most Popular
Most Commented
Featured Columnist
Horoscope Guide
Aquarius Aquarius Libra Libra
Aries Aries Pisces Pisces
Cancer Cancer Sagittarius Sagittarius
Capricorn Capricorn Scorpio Scorpio
Gemini Gemini Taurus Taurus
Leo Leo Virgo Virgo
Local Attractions
Bend Visitors & Convention Bureau
Bend Visitors & Convention Bureau

Mt. Bachelor Resort
Mt. Bachelor Resort

Les Schwab Ampitheater
Les Schwab Ampitheater

Deschutes County Fairgrounds
Deschutes County

Tower Theatre
Tower Theatre

The High Desert Museum


Deschutes County

  Web    BendWeekly.com
© 2006 Bend Weekly News
A .Com Endeavors, Inc. Company.
All Rights Reserved. Terms under
which this service is provided to you.
Please read our Privacy Policy. Contact us.
Bend Weekly News & Event Guide Online
   Save the Net
External sites open in new window,
not endorsed by BendWeekly.com
Subscribe in NewsGator Online
Add to Google Add to MSN Add to My AOL
What are RSS headlines?