House Passes Bill Taxing AIG Bonuses, Republicans Switch Votes In Droves

The House overwhelmingly passed legislation on Thursday to tax bonuses paid out by AIG and other bailed-out firms at a rate of 90 percent. "We want our money back and we want our money back now for the taxpayers," said Speaker Nancy Pelosi (D-Calif.)

But the measure passed, 328-93, only after a hectic scene in which dozens of Republicans switched their votes from no to yes.

The bill required a two-thirds majority because Democrats brought it up under a suspension of regular rules. As the vote unfolded, Rep. Mike Simpson (R-Idaho) told the Huffington Post that he had voted no.

He then paused and added: "So far."

Worried about that vote?

"I might be," he said. "The politics is to vote yes. The policy is to vote no...Everybody's pissed off about those bonuses. So am I. I don't know that you violate the Constitution in order to get them back, which I think this does. We'll see."

When the final roll was called, Simpson was a no. "They're just playing politics with this," he said.

By that reasoning, 85 of Simpson's Republican colleagues, who all voted yes, were doing the same.

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A senior House Republican aide said that Minority Whip Eric Cantor (R-VA.) did not whip the vote and that members were free to vote however they chose. Cantor voted yes. Minority Leader John Boehner (R-Ohio) voted no.

A united bloc of House Republicans could have killed the bill -- and that's just what Democrats were hoping would happen, Simpson said.

"The only reason it's on suspension is so if it fails, they can blame us. And they don't want it to pass, otherwise they'd run it under a rule," he said. Under normal rules, a bill only needs a simple majority.

"Expediency isn't the issue. It only takes an hour to do a rule," said Simpson "So it's phony. It's a phony bill. They know it won't become law."

"The bill passed well beyond the two-thirds margin necessary," said Kristie Greco, spokesperson for House Majority Whip James Clyburn. (In all, 243 Democrats and 85 Republicans voted "yes" on the bill. It was opposed by six Democrats and 87 Republicans.)

"The American taxpayers are outraged by the AIG bonuses and the House acted to recoup taxpayer money," Greco said.

Additional reporting by the Associated Press

Comments

[mickeydougal]

It's amazing how unethical the posters to this blog are. Number one, AIG had given it's word, in written contracts, to pay these bonuses. To anyone with ethics, that should be enough to say that, as distasteful it might be, they are obligated to pay them.

But beyond that is that darned old piece of paper, the U.S. Constitution. My sister, who is a lawyer (and a liberal, to boot) pointed this out to me. Article I, Section 9 prohibits Congress from "bills of attainder" and "ex post facto" laws. What this means is that the Congress can not compel ANYONE to breach a legal contract. Anyone who says they should force AIG to take the money back is encouraging them to violate the Constitution. And the ex post facto bit means it is a violation of the Constitution for Congress to pass laws, including introducing new taxes, AFTER THE FACT! If you wash your car on a Wednesday legally, and on Thursday the Congress makes it illegal to wash your car on a Wednesday, IT DOES NOT APPLY TO THE FACT THAT YOU WASHED YOURS YESTERDAY!

We need to all stop, take a breath, and stop allowing ourselves to be swept up in this hype. It's amazing how many of you, who I would argue are basically decent people otherwise, are advocating this illegal, immoral and unethical behavior by the Congress.

[redkim]

And so the Constitution goes out the window. Bill of attainder, anyone?

[scootmandubious]

There are those that say this is unconstitutional and dangerous. However, we are talking about the use of taxpayer dollars to bail out failed corporations, not gratuitously taxing the wealthy.

There has to be some form of restriction the government should be allowed to apply if they are the ones offering financial assistance.

If a corporation does not like the restrictions attached to a bailout, let them suffer the consequences of their mismanagement, or seek private funding.

I do not want my tax dollars enriching the greedy corporatists who got us into this mess.

Whatever happened to bonuses based upon performance?

[mickeydougal]

NEGATIVE, GHOSTRIDER! scootmandubious, if it is a choice between the economy failing and the constitution failing, which it sounds as though you are advocating, I would rather let the former fail than the latter. An economy can be rebuilt. A Constitution, once abandoned, can not.

[OMG1109]

I guess 87 republicans were not as OUTRAGED as they stated they were...it's all SHOW!!

[schicklett3]

87 republicans voted against the bonus tax..... WHO are they and why isn't their names making headlines?

[freedomitchy]

The bill is unconstitutional and sets an awful precedent, the use of tax legislation to attack political enemies. This is right out of the banana republic handbook. Why don't the Democratic congress and Obama believe in the constitution and follow the rule of law? New boss.......

[OMG1109]

Thinking they knew this but wanted to send a message.............However, seems like 87 Republicans forgot just how OUTRAGED they were!!

[EndTheEcho]

Rule of law? Isn't this a new law, seriously, that is what Congress does, they make laws. If it is unconstitutional, then the aggrieved party can challenge constitutionality of it, and the courts will decide.

Can you explain why you think it is unconstitutional, just saying it doesn't necessarily make it so, I am looking for reasoned argument for that case.

Political enemies, not sure that is who these folks are, but not political enemies, more like untouchables, and toxic minority and for a change Congress seems to be reflecting the will of the majority of Americans, not just those that make big campaign contributions. Is that the right reason for legislation, hell no. But considering that the contracts of the UAW didn't seem so sacred, it is nice to see a different tact on addressing this issue.

And after the past 8 years with the torture memos and retroactive immunity to telecoms for aiding and abetting warrantless wiretapping by the government, well it is a nice ideal to believe in, but I a not hold my breath.

[pikaomega]

Hmm...I'm not too sure about this one. As satisfying as it may be to see a clawback effort on the part of Congress to recoup some of the ill-gotten gains of these firms on the taxpayer dole, I read the bill (found here: http://www.thomas.gov/cgi-bin/query/z?c111:H.R.+1586: ), I am also suspicious of the dubious constitutionality of the legislation. The bill outlines the bonuses subject to the 90% tax as any person who is affiliated with a firm that received TARP funds as of Dec. 2007, in excess of a.) the recipient's annual adjusted gross income or b.) $250,000.

I am anxiously awaiting the (surely) impending discussion of the legal aspects of enacting such retroactive putative measures, regardless of how warranted they may be. If anyone happens upon such discussions, especially by constitutional scholars, please post links here...I haven't seen any quite yet.

[solarian]

pass out the paracutes the republicans are bailing in droves ha ha

[vgirl1]

I too am angry, but this tentative law is unconstitutional. It will in the long run do more harm than good to America if it is passed. When will anyone, any business or any country ever trust in American contractual or constitutional law again?

Our House of Representatives should be ashamed. This legislation is overly punitive, over compensating for Congress's ineptitude. Why punish a young family living in NY, NJ or CN making $250K when the people Congress is really mad at are themselves and those millionaires getting million dollar bonuses?

Why has the Congress so overreacted by putting such a minimal floor on this bill? People in this range are those who generally met their contractual requirements while their leaders took down the house. Why is the Congress so willingly hurting average young families while trying to get back at corporate millionaires for receiving million dollar bonuses?

Congress and these millionaires are to blame here, not young families, and with this tax, young families who are doing what we ask of them and who are trying to get by will bear the brunt of this unconstitutional taxation. Taxation which will in fact cause them to pay more tax than the actual small bonuses they received.

[reversed]

> Why is the Congress so willingly hurting average young families while trying to get back at corporate millionaires for receiving million dollar bonuses?

As far as I can tell (from the legalese), this law is aimed at individuals associated with businesses that accepted TARP funds and then only taxes their bonuses (not "average young families"). I don't see what "young" has anything to do with anything and only relevant members of an individual's family would be taxed. Also, persons making in excess of $125,000 are not "average". And you make it sound like all families are being taxed when they're not.

> Taxation which will in fact cause them to pay more tax than the actual small bonuses they received.

It doesn't seem like that's the way the law is designed. Perhaps I'm misreading it?

[BarackDaVote]

Where is the media outrage and coverage about this????????

[timberdoodle]

Democrats are being extremely mean by forcing Republican's to be held accountable for how they vote. Don't they realize Rush has instructed them to oppose all measures the Democrat's initiate. I guess they can always call Rush and tell him they are sorry.

[dillydawg]

Brilliant move by Nancy Pelosi. The Republicans are now on record for voting for a 90% tax hike.

[OMG1109]

yep!!

[grf67]

This legislation is terminally stupid. Thje Congress has not done anything this annoying since they rushed to protect Terri Schivo when she did not need protection. Legislation for a few handfulls of people have no place in the Congress.

[Lemmy]

A bill that is hollow and impotent - just like the House Democrats. Too bad some Republicans joined in on the charade.

[mickeydougal]

wow, grf67, you should run for office yourself. trying to sway people's opinion by ripping open old wounds and pouring battery acid on them... brilliant!

[Liberalforsure]

87 Rethuglicans voted no,how interesting. Guess they weren't all that OUTRAGED at the bonus', huh? They prove on a daily basis they are the party for the rich only.

[mickeydougal]

No, they remembered they are sworn to serve the Constitution. To vote for this tax would be a violation of it. Since the Constitution means little or nothing to most Democrats, it was easy for them to vote for it.

[whirledpiece]

A society should be even more careful in writing laws than breaking them, this law sends a very wrong signal, I tell my friends to invest in the US rather than say Dubai because, there the laws are made by an individual and can be changed on a whim, it is scary to invest or live in a place where laws can be targetted for a narrow short term objective no matter how noble the cause may be. In this case, the bonusses are a bad idea, the judicial system is there for help, let there be law suits against each individual who has taken bonusses v/s the American people, let the Attorney general represent the people and lets get the judicial system to get our money back from these guys, yes there will be costs associated with the process, but this is anyway not about costs it is about the right thing, and this would be the right thing to do, not pass some angry law.

[buddhistMonkey]

That's a whole lot of Republicans voting to raise taxes into the 90% bracket. Kind of puts the lie to the phrase "tax and spend liberal," doesn't it? Nice work cornering these hypocrites, Nancy.

[MargaretO]

hehehehehehe

[mickeydougal]

It's a one-time stop-gap measure to try and make up for the foolishness of the bailout in the first place. And when the un-Constitutionality of this is made clear, there are going to be a lot of people in serious trouble.

[Bubba Gump]

Rep. Mike Simpson (R-Idaho) said, "The only reason it's on suspension is so if it fails, they (Democrats) can blame us." Would it really matter, if Republicans actually held to core values? Nice to see that over 49 percent of House Republicans can vote to raise taxes when they want too! But not a one would vote to help hurting average Americans by voting for the Stimulus Bill.