POLITICS

GOP Fissure Over AIG Bonuses

04/19/2009 05:12 am ET | Updated May 25, 2011

The AIG bonus scandal is dividing congressional Republicans internally and spurring frustration in the broader conservative movement, with the most recent cracks showing up over whether to support legislation to tax away the bonuses.

The Associated Press reports that House GOP leadership has decided to oppose the bill:

Democrats pressed for quick action Thursday on a bill to slap punishing taxes on big employee bonuses from firms bailed out by taxpayers, Republicans called it a legally questionable ploy to paper over Obama administration missteps.

The bill would levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.

But Minority Leader John Boehner, R-Ohio, called the bill "a political circus" diverting attention from why the administration hadn't done more to block the bonuses before they were paid.

"The Democratic bill brought to the floor today is constitutionally questionable," said Rep. Mike Pence, R-Ind. "It's obviously a transparent attempt to divert attention away from the truth that Democrats in Congress and this administration made these bonus payments possible."

But not all Republicans are aligned with Boehner and Pence, Politico reports.

[A] senior GOP aide said the conference would likely split on the vote, with conservative members of the Republican Study Group opposing the tax and members in more competitive districts casting their lot with Democrats.

Boehner, the aide said, told members to "vote their conscience" at a meeting this morning and declared that the leadership would "not whip the bill."

Media Matters notes that conservative commentators are out of step with the Republican party on the whole affair. Rush Limbaugh, Glenn Beck, and Sean Hannity are defending the AIG executives while GOP leaders in Congress denounce them. As Greg Sargent noted:

This split could muddy the GOP message and even compromise the party's efforts to use AIG to damage Obama. After all, GOP leaders are now mulling whether they should call for Tim Geithner's head over the bonuses. If leading conservative media figures keep suggesting to rank and file Republicans that there's nothing wrong with the bonuses, how will that mesh with the claim by GOP leaders that we should hold Geithner accountable for them?

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