04/26/2009 05:12 am ET Updated May 25, 2011

Bonus Ban Passes House Committee

The House Financial Services Committee approved legislation Thursday that would ban bonuses for employees at any financial firm that has benefited from TARP funds.

"This bill is based on two simple concepts," said bill co-sponsor Rep. Alan Grayson (D-Fl.) in a written statement. "One: no one has the right to get rich off taxpayer money. And two: no one should get rich off abject failure."

The legislation would ban bailout beneficiaries from doling out non-performance-based bonuses, retention payments, or even plain-old "excessive compensation."

The bill -- which the committee proposed last week amid a wave of populist rage over $165 million in bonuses for AIG employees -- would complement other in-process legislative efforts, such as the measure approved by the House that would levy a 90 percent tax on bailout bonuses. The outright ban could reach the House floor as early as next week.