TPM News

Washington's most powerful lawmakers are morphing into kitchen-table populists this morning with neck-snapping speed, as the House prepares to vote on a bill that would slap a 90% tax on AIG's infamous executive bonuses.

Republicans, while openly wavering on whether their anti-tax creed would allow them to back the AIG tax bill, are pushing an alternative plan crafted by two of their freshmen, Leonard Lance (NJ) and Erik Paulsen (MN).

The GOP bill would force a recouping of 100% of the AIG bonuses -- and the party clearly smells blood in the water as Sen. Chris Dodd (D-CT) becomes a scapegoat for the executive-pay debacle. Here's how House Minority Leader John Boehner's (R-OH) describes the Lance-Paulsen bill this morning:

Let's be honest. The legislation House Democrats are bringing to the floor today, which they claim is the best way to recover the AIG bonuses, is a sham. In a perfect world, it would lead to partial recovery of the bonuses a year or more from now - when the executives get around to paying their income taxes. And because the legislation is so riddled with loopholes, it wouldn't even lead to the recovery of all of the bonus dollars.

How is that a fair deal for taxpayers?

Don't taxpayers deserve to get 100 percent of their money back?

After all, they aren't responsible for the AIG executives getting the $165 million; Democrats in Congress and the Administration are. They're the ones who rushed through the trillion-dollar "stimulus" spending bill that allowed the bonuses to be paid in the first place.

In reality, the AIG bonuses were agreed to in the first quarter of 2008, and it's not clear whether Dodd's concessions to the Treasury Department on his CEO-pay amendment would have made any difference in getting the money back. Meanwhile, an amendment that would have punished AIG for its free spending, from Sens. Ron Wyden (D-OR) and Olympia Snowe (R-ME), was turned back by the administration during conference talks on the stimulus.

Just when you thought it was impossible to find more proof of the bungling of the bailout ... Rep. John Lewis (D-GA), chairman of the House Ways and Means oversight subcommittee, announced this morning that his panel had found 13 of the top 23 recipients of TARP owing the government $220 million in back taxes.

Making matters worse was the fact that any company getting TARP aid had to certify to the Treasury Department that they didn't owe back taxes before getting their share of the bailout, as Lewis explained. It appears that Treasury took the bailed-out businesses at their word rather than asking to actually see their tax records.

If there's any doubt remaining that Congress would not approve any more spending on the financial rescue, Lewis' opening statement this morning should put it to rest:

Taxpayers have no sense that there is any control over this money. They have no idea what, if anything, they will get in return. This entire program is based on trust - trust in the givers and trust in the takers. At this point, there is no trust.

To get money from Treasury, banks and others must sign a contract that states they have no material unpaid Federal taxes. Treasury did not ask these banks and companies to turn over their tax records. Treasury relied on the signed statements when it agreed to invest billions of taxpayer dollars. When you or I go to the bank to take out a mortgage to buy a house, we are asked for our tax returns. They're not going to just take our word for it, and we are not asking for millions of dollars.

The Subcommittee looked at the top 23 TARP recipients. We found that thirteen of them owed more than $220 million in unpaid Federal taxes. Two companies owe over $100 million each. How can this be? If we looked at all 470 recipients, how much would they owe?

Are they signing contracts knowing that they owe taxes but thinking they will not get caught? Did then-Secretary Paulson turn a blind eye? Either way, this is shameful. It is a disgrace. The American people are fed up, they are fired up, and they're not going to take it anymore. As members of Congress, we shouldn't take it anymore either.

A new survey of North Carolina from Public Policy Polling (D) indicates that GOP Sen. Richard Burr could be in serious trouble in 2010, as he runs for re-election in a state that flipped from the Republicans to the Democrats last year.

Burr's approval rating here is only 35%, disapproval is 32%, and a third of likely voters are undecided -- not very good numbers for an incumbent, to say the least. Against a generic Democrat, Burr has an initial lead of 42%-38%, with the incumbent well below 50%. Against Secretary of State Elaine Marshall, it's a very similar 43%-35% margin for Burr.

Democrats and independents are also more likely than Republicans to be undecided, suggesting that Burr already has much of his base locked down.

From the pollster's analysis: "A large segment of the electorate knows nothing about him and among those who do he's basically running 50/50. That makes him very vulnerable to a strong Democratic challenge next year."

It hasn't gotten much attention, but New York Attorney General Andrew Cuomo said yesterday that he'd publicly release the names of the AIG bonus recipients, reports the New York Times.

Cuomo is investigating the payouts, as well as those made by Merrill Lynch and several other Wall Street firms. He issued a subpoena for the AIG names earlier this week.

His declaration followed the news that a court has ruled that Bank of America, which owns Merrill, must give him the names of the Merrill recipients. That ruling suggests that Cuomo will likely also get the AIG names. AIG lawyers had referred frequently to the Merrill case this week, and had delayed giving Cuomo the names pending the outcome of that case.

Yesterday, AIG CEO Edward Liddy declined to assure Congress he would cooperate fully with Cuomo's probe, citing concern for the physical safety of employees who received bonuses, were their names to be made public.

The attack ads are getting pretty intense in the March 31 special election for Kirsten Gillibrand's old House seat, with the Democrat blasting the Republican for opposing the stimulus bill -- and the Republican launching an ad accusing the Dem of supporting the AIG bonuses.

Here's the new ad from Democratic candidate Scott Murphy, going after Republican Jim Tedisco for saying a few days ago that he would have voted no on the stimulus bill:

"Here's the answer, folks, get ready," we see Tedisco saying in footage from Monday. "No!" The repetition of the "No!" video is reminiscent of all those Americans United For Change ads, taking GOP leaders who say "no" and tying them to Rush Limbaugh.

Read More →

While we've all been focused on those AIG bonuses, there's been a major development in the Wall street bonus saga that seemed, a week ago, like the ultimate in outrageous corporate behavior.

A court ruled yesterday that Bank of America will have to turn over to New York Attorney General Andrew Cuomo the names of the Merrill Lynch employees who received a total of $3-4 billion in bonuses. Bank of America, which since the start of the year has owned Merrill, had been resisting giving Cuomo the information.

Cuomo said he could release the names as soon as today.

Merrill approved the bonuses last December under then-CEO John Thain, on an accelerated schedule, apparently to ensure they went into effect before the firm came under the control of B of A.

It seems Fannie Mae missed the memo: massive bonuses are out of style. The mortgage finance company plans to pay four top executives retention bonuses of $1 million each, more than double the amount paid out last year, according to a document filed with the SEC. Like bonuses paid to executives of Merrill Lynch and AIG, the payments are controversial because Fannie Mae recently received billions of dollars in federal aid and was essentially taken over by the government in September. Fannie Mae said that financial regulators approved the bonuses because keeping top employees "was essential to ensure our viability through 2010." (Associated Press)

Read More →

House To Vote On Bonus Tax Today The House of Representatives will vote today on a bill to tax bonuses of over $250,000 at financial institutions receiving bailout money, at a rate of 90 percent. Charlie Rangel explained to reporters: "We figured that the local and state governments would take care of the other 10 percent."

Obama In California -- Will Appear On Jay Leno President Obama is in California today, with a 1:30 p.m. ET tour of the Edison Electric Vehicle Technical Center Garage of the Future in Pomona, and a speech there at 1:45 p.m. ET. At 4:10 p.m. ET he will visit the Miguel Contreras Learning Center in Los Angeles, where he will be accompanied by Gov. Arnold Schwarzenegger, Mayor Antonio Villaraigosa, and Labor Secretary Hilda Solis. At 7:20 p.m. ET, he will tape an appearance on the Jay Leno show. And then tonight he will head back to Washington.

Read More →

Who in the Obama Administration pushed to weaken a key anti-bonus provision in the stimulus bill last month? Sen. Chris Dodd, who wrote the provision -- and ultimately agreed to defang it -- isn't saying.

Ever since the AIG story broke, we've heard about the company's binding contracts as a key barrier to the government blocking bonuses to AIG executives.

It turns out that a provision in the stimulus, which passed in February, prohibits the government from blocking any bonuses that were part of contracts agreed to before February 11. That provision has taken on new relevance this week because it would complicate any government effort to claw back the AIG bonuses.

Read More →