Senators to Geithner: You Could Have Backed Our Bonus Reforms

Washington can have a woefully short memory. But Sens. Ron Wyden (D-OR) and Olympia Snowe (R-ME) remember what TPMDC reported on just last month: their proposal to force bailed-out companies to rescind executive bonuses could have made it into the stimulus bill, but was stripped out by Democratic leaders at the last minute.

Wyden and Snowe are now asking Treasury Secretary Tim Geithner to support their bailout bonuses measure, which could have prevented much of the current AIG flap and was scored as a money-maker for the U.S. government.The proposal would retroactively recover all cash bonuses to bailout recipients that exceeded $25,000, and companies that didn’t return the money would be subjected to a 35% excise tax. (AIG, under this arrangement, would have had to pay about $58 million in taxes if it wanted to cling to its executive bonuses.)

Wyden and Snowe plan to quickly introduce their plan as free-standing legislation. In their letter, they remind Geithner:

The [stimulus bill] contained provisions that required you to review bonuses and “seek to negotiate” with TARP recipients regarding appropriate levels of compensation. This does not appear to have produced any results.