CCAGW to Congress: Enough of the Faux Fury!

Taxpayer Watchdog Urges "No" Vote on Bogus AIG Bonus Bill

WASHINGTON -- The Council for Citizens Against Government Waste (CCAGW) today urged members of the Congress to oppose a bill to tax the bonuses of AIG employees. The bill (H.R. 1586), which is being considered shortly in the House, aims to tax the bonuses of employees at companies that received money through the Troubled Asset Relief Plan (TARP) at 90 percent. It is narrowly crafted to claw back a portion of the $160 million in retention bonuses that AIG paid to its employees. News of the bonus schemes has cause widespread outrage among taxpayers.

"It is completely understandable for taxpayers to be enraged over the distribution of bonuses to employees at financial institutions that receive taxpayer bailout money, including AIG and Fannie Mae and Freddie Mac," said CCAGW President Tom Schatz. "However, taxpayers should be aware that this whole phony outrage performance on Capitol Hill and the White House is political kabuki theatre. Taxpayers should target their anger at Congress and White House officials from both administrations, since they are the real culprits. The Bush administration came up with the concept and Congress wrote the original TARP bill and rammed it through with no meaningful oversight and no enforceable limits on executive compensation. Then, the Obama administration and certain members of Congress wrote the so-called 'stimulus' bill, which contained language explicitly allowing the bonus schemes to go forward. Now the politicians are feeling the heat over their irresponsible behavior and are trying to deflect it by demonizing and punishing AIG. They should not be allowed to get away with it."

Since the enactment of TARP, taxpayers have heard widespread reports of recipient banks using TARP funds to take their employees on spa retreats, hoarding the money instead of making consumer and small business loans to help unfreeze the credit markets, and buying up other banks with the funds. The AIG bonuses are just the latest in a series of embarrassing expose on this behavior. However, it is becoming crystal clear that the AIG bonuses were given a green light by the U.S. Treasury Department. Senate Banking Committee Chairman Chris Dodd (D-Conn.) admitted yesterday that he inserted language into the massive $787 billion so-called "stimulus" package explicitly protecting AIG's bonus scheme.

"Congress has lost its bearings. It is unconscionable and probably unconstitutional for them to enact a bill targeting a group of individuals for doing exactly what they were permitted to do by Congress itself," concluded Schatz. "The TARP bill is a huge debacle. But it's time to put credit where credit is due and stop insulting the intelligence of taxpayers. Congress and both administrations bear full responsibility for the failure of TARP and they should not be allowed to use the people's House and the long arm of the federal government to shield themselves from accountability."

CCAGW is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.