WASHINGTON – Congressional Democrats vowed Tuesday to all but strip AIG executives of their $165 million in bonuses as expressions of outrage swelled in Congress over eye-catching extra income for employees of a firm that has received billions in taxpayer bailout funds.
“Recipients of these bonuses will not be able to keep all of their money,” declared Senate Majority Leader Harry Reid on the Senate floor.
“If you don’t return it on your own, we will do it for you,” said Sen. Chuck Schumer of New York.
The bonuses were paid under legal contracts, part of a program that had been disclosed in advance filings that American International Group Inc. made with the government.
New York Attorney General Andrew Cuomo said the company paid bonuses of $1 million or more to 73 employees, including 11 who no longer work for the failed insurance giant.
House and Senate Democrats were crafting separate bills to tax up to 100 percent of the big bonuses awarded by companies that were rescued by taxpayer money.
Separately, House Financial Services Committee Chairman Barney Frank, D-Mass., said the government should assert its rights as the owner of about 80 percent of AIG and sue to recover the bonuses.
“This is ridiculous,” exclaimed Sen. Jon Tester, D-Mont. He said AIG executives “need to understand that the only reason they even have a job is because of the taxpayers.”
AIG chief executive Edward Liddy is to testify Wednesday before a House subcommittee.
Sen. Charles Grassley, R-Iowa, suggested in a radio interview on Monday that AIG executives should take a Japanese approach toward accepting responsibility by resigning or killing themselves.
Grassley spokesman Casey Mills said the senator wasn’t calling for AIG executives to kill themselves, but said those who accept tax dollars and spend them on travel and bonuses do so irresponsibly.
———
White House says it backs Geithner
WASHINGTON – The White House stood by Treasury Secretary Timothy Geithner on Tuesday amid widespread outrage over millions of dollars in bonuses insurance giant AIG gave to executives after receiving federal bailout money.
White House spokesman Robert Gibbs said President Obama had confidence in Geithner and the Treasury Department’s oversight.
Republicans said Obama and his administration should have leaned harder on AIG executives to reject the bonuses of $165 million for top executives. AIG has received tens of billions of dollars in bailout money.
The Associated Press