Here’s what U.S. Sen. Barbara Boxer, D-Calif., had to say on the Senate floor today about the $165 million in bonuses being paid out to executive and top employees at AIG, the insurance giant which recently received about $170 billion in taxpayer funds as a bailout to prevent bankruptcy:
This Associated Press article does a good job of putting the bonuses in context, at least to some extent. People are angry that AIG employees seem to be richly rewarded for catastrophic failure that has put the world economy at risk, and that’s entirely understandable, but the truth is: this bonus incentive system is how Wall Street works, and perhaps the politicians’ ire would’ve been more helpful before all the papers were signed and our money handed over, back when it would’ve been easier to re-open the AIG workers’ contracts and deal with this issue.
Anyway, some more of your voices in Congress speak out about the AIG bonuses, after the jump…
“AIG executives did not earn a bonus, they should not accept a bonus, and if they already did accept it they should return the bonus. And from those who don’t return the bonus money voluntarily, we’re going to get the money back for the taxpayer,” said House Labor and Education Committee Chairman George Miller, D-Martinez. Miller has signed on as a co-sponsor of a bill by Rep. Steve Israel, D-NY, which would tax up to 100 percent of the bonuses in order to get that money back into the public coffers.
Rep. Ellen Tauscher, D-Alamo, said if AIG is indeed contractually obligated to pay these bonuses, “Congress and the Obama administration – with all of its lawyers and legal firepower – can certainly find a way to restructure the bonuses so they are paid only after the taxpayer is repaid and I am pleased that President Obama and Secretary Timothy Geithner will try to block the bonuses.”
“Bonuses can be a legitimate tool to make a business competitive and retain a highly competitive workforce, but AIG’s poor decisions have damaged the economy,” she added. “Compensating the unit at the center of those bad decisions shows a callous disregard for Americans struggling everywhere.”
House Minority Leader John Boehner, R-Ohio, lays blame at the Obama Administration’s feet: “Two weeks ago, the President’s spokesman said that they were confident that they knew how every dime was being spent at AIG. Well clearly, they didn’t know what they were talking about. I think this is outrageous, and I think the American people are rightly outraged that their tax money is going to pay bonuses to the very people that got this company in trouble.”
Whatever President Obama’s spokespeople did or didn’t say in recent weeks, it was the Bush Administration that saw the AIG bailout go forward without addressing the bonuses. The Federal Reserve Bank last September put up $85 billion to stabilize the struggling AIG, and then upped the amount in subsequent months; we the taxpayers now own 80 percent of the company. All these bonuses now at issue were set in contracts signed before the bailout began.