The House is debating HR 1586, a bill that would tax bonuses given to employees of bailed out businesses. The bill would tax “90 percent of the TARP bonus received by the taxpayer.” The TARP recipient’s employer must have received the money from “the Emergency Economic Stabilization Act of 2008″ (the TARP bailout), “the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation”, “members of the same affiliated group” (units of the TARP recipients, FNMA and FHLM monies), and affiliated partnerships. Conservatives in the House and Senate need to use this debate as an opportunity to debate how this provision was placed in the Obama so called Stimulus bill and forbidding future bailouts.
This effort in the House and Senate to tax bonuses is not much more than a cover your backside vote to protect the Obama Administration and liberals in Congress who requested, through Treasury, that the AIG Bonus Protection Amendment be put in the Stimulus. If conservatives in the Congress want to show some leadership, they need to use the bonus debate to fight the further nationalization of private enterprise.
The debate on how this provision was added to the Stimulus was intensified yesterday when Senator Dodd admitted to FOX News that Treasury had requested the bonus protection language be added to the Stimulus.
In a dramatic reversal Wednesday, Sen. Chris Dodd, D-Conn., confessed to adding language to a spending cap in the stimulus bill last month that specifically excluded executive bonuses included in contracts signed before the bill’s passage. Dodd told FOX News that Treasury officials forced him to make the change.
Congress should investigate who put the language in the Stimulus and how it happened. Senator Dodd was not a conferee on the Stimulus bill, yet the bonus protection language was added in the secret conference committee on the Stimulus. The Democrat conferees on the bill were Senator Harry Reid (D-NV), Max Baucus (D-MT) and Daniel Inouye (D-HI). Which one of these Senators added the language? Conservatives need to force a debate and possible Amendments setting up a means to investigate who at Treasury requested the change and how the change was added to the Stimulus conference report.
As I previously posted, Senator Jeff Sessions (R-AL) argued this week that bailouts are the problem — not bonuses.
The bonuses for thousands of employees of AIG – the huge insurance company to which the government, the taxpayers of the United States, have shoveled $170 billion into to keep afloat – recall the Sessions maxim, announced about 20 years ago when I was U. S. Attorney attempting to faithfully enforce a host of federal regulations. It is stated: “Oh, what a tangled web we create when first we start to regulate.”
Conservatives are outraged by the bonuses, because taxpayer monies are being used to reward failure. It seems patently unconsitutional to retroactively tax recipients of these bonuses, yet Congress seems to be putting a legislative Band-Aid over the bailout problem in an effort to do something about the bonuses. Congress should forget about the bonuses, abolish the TARP and investigate how this controversial provision was added to the Stimulus bill if they want to make this debate productive.