Lawmakers target 'outrageous' AIG bonuses
Members of both parties are mad at the insurance giant. But big questions remain over what they can do about it.
At $165 million, the bonuses at American International Group (AIG) are small change compared with the $170 billion-plus that US taxpayers have already poured into a rescue of the embattled insurance giant.Skip to next paragraph
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But disclosure of bonuses at the firm seen as the epicenter of a global financial crisis set off a firestorm on Capitol Hill.
Outrage was the No. 1 theme at hearings, briefings, and caucus meetings early this week – some lawmakers complained, to the exclusion of all else.
“There’s a tidal wave of rage, because the taxpayer knows they are the ultimate sucker on the list of those who pay for all of the greed that has gone on in the marketplace for years and years,” said Gary Ackerman (D) of New York at a hearing on the AIG bailout on Wednesday.
What’s less clear is what, beyond rhetorical saber rattling, the Congress can do about it.
The first move is to summon those responsible to a battery of congressional hearings.
“We ought to bring lawsuits to say: These people performed so badly, the magnitude of the losses are so great, that we are justified in rescinding the bonuses,” he said.
With the government bailout, AIG is now 80 percent owned by the federal government.
On Monday, President Obama pledged to “pursue every legal avenue to block these bonuses and make the American taxpayers whole.”
But Democrats on Capitol Hill want a quicker flexing of legislative muscle to show voters that they get it.
After disclosure of the AIG bonuses last weekend, lawmakers rushed to draft a legislative remedy to recapture those bonuses for taxpayers.
First off the mark, the Senate Finance Committee is proposing new legislation to “discourage excessive compensation by companies that have taken taxpayer funds.”