Friday, March 20, 2009

Tough Talk

Congress passed a bill that would tax the bejesus out of bonuses paid to executives at financial firms getting government aid.

A quickly assembled House bill was approved 328 to 93. It struck hard at Wall Street’s compensation system, which has come under fire because of the $165 million in bonuses distributed last week by American International Group to executives of the troubled unit that helped lead the insurance giant to the brink of collapse. Under the legislation, those who received bonuses of more than $125,000 would surrender 90 percent of their payments to a special income tax.

But the bill’s reach would extend to bonuses paid to tens of thousands of employees at the nation’s nine largest institutions that have received at least $5 billion in assistance under the $700 billion financial rescue package Congress approved last year. The measure also applies to Fannie Mae and Freddie Mac, the mortgage giants the federal government took over in September.

The Senate still has to pass it, and there’s that little detail as to whether or not the bill passes Constitutional muster — there’s a specific prohibition against retroactive laws and bills of attainder, which means a law that singles out an individual or a small group (which makes you wonder why DOMA is legal) — but the interesting thing is how many Republicans voted for the bill. After all, they said they were against it before they were for it. But even one of their leading lights, Rep. Eric Cantor (R-VA), ended up voting for it.

To be fair, the Republicans did offer an alternative proposal: a non-binding resolution suggesting to Treasury Secretary Timothy Geithner that he come up with a way to get the money back. How? Well, that’s not spelled out. This is the equivalent of the skinny nerd going up to the class bully and politely asking for his lunch money back. I am sure that Wall Street is quaking in their Guccis.

Is it any wonder that nobody really takes the Republicans seriously any more?