Congress threatening AIG Bonuses

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.

House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by companies rescued by taxpayer money. Republicans said President Barack Obama’s administration should have done more to stop the bonuses.

The Internal Revenue Service currently withholds 25 percent from bonuses less than $1 million and 35 percent for bonuses more than $1 million.

As lawmakers stampeded to the microphones over the American International Group Inc. bonuses, the Obama administration said it was trying to put strict limits on how future government bailout dollars could be used. On Monday, Obama lambasted the insurance giant for “recklessness and greed” and pledged to try to block payment of the bonuses. Sen. Charles Grassley suggested in an Iowa City 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.

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The problem here with this, is that government is slowly but surely beginning to regulate how the private sector manages the way companies reward their top performers. Sure, there were screw-up’s in the past– but… How do you expect to capture new talent (employees) by enforcing a salary cap on those who are willing to bust their butt to turn AIG around. “Bring us out of the red and we’ll toss an Olive Garden gift card your way.”