Congress Goes After AIG Bonuses

The government giveth, and the government shall taketh away. Lawmakers are moving to tax away the $165 million in bonuses paid to AIG employees. Senators including Finance Committee Chairman Max Baucus are proposing a special tax as high as 100 percent on the “retention bonuses” paid to 73 employees in the insurance giant’s financial products subsidiary, 11 of whom no longer work at the company. Some lawmakers, The Wall Street Journal reports, see the tax as a pressure tactic to goad the AIGers into giving up the bonuses voluntarily. Other senators, including Chuck Schumer of New York, have signed a letter to AIG CEO Edward Liddy demanding he renegotiate the bonuses, while the Obama administration is seeking to use a clause in the stimulus that would allow Treasury Secretary Tim Geithner to claw back the payments if they were “inconsistent with the purpose” of the TARP.