The bailout itself was a bad idea. Government ownership of private business is the real problem. Some Texas Republican members of Congress recognized that the special AIG tax was a trojan horse for some pretty terrible things, and they voted against it.
Still, it passed with big margins. Tyranny of the majority in action. It is also why the Founding Fathers set up the Senate to be far more deliberative and slow... to put the brakes on populist lynch mobs. It's also why they set up the presidential veto and the Supreme Court, to add a couple more layers that may put a halt to excessive action.
On the other hand, we the taxpayer bailed out AIG, and now they are using that money for seemingly frivolous things, even if they did owe those bonuses according to the contracts.
What will Kay do when this issue hits the Senate next week (link)? Excerpt follows:
She is trying hard to distance herself from the Kay Bailout label, and on MSNBC's Hardball last week, she gave the distinct impression that she agreed with Senator "Lyle and Eric" Menendez and was all for a punitive tax on AIG (link).
One objection to the bill is that it’s unconstitutional to target one individual or group with a law in such a way.
Although a similar Senate bill was stopped in its tracks Thursday, senators are expected to vote on legislation next week designed to take back the bonuses.
U.S. Sen. John Cornyn, R-Texas, said Congress should first have hearings to find out how the bonuses were allowed to be paid out, who’s responsible and how to make sure it doesn’t happen again.
“We ought to be careful,” Cornyn said. “We ought to be deliberate.”
U.S. Sen. Kay Bailey Hutchison, R-Texas, wants to recoup the bonuses but feels there are better options than taxing them away.
“I agree with the people who say, first of all, they should voluntarily not take these bonuses,” Hutchison said on MSNBC’s “Hardball” this week.
She was not adamant about it, and she left herself a little wiggle room with her indecisive statement, but Kay did leave the impression that she was for 100% taxation (link). Excerpt follows:
BRZEZINSKI: Senator, are you with your colleague, Senator Menendez there, as well as Chuck Schumer, that if they don‘t give the money back, Congress will move forward to tax them 100 percent so the money gets back some way, somehow?She wants AIG to do something "voluntarily," but if they don't... is she backed into a corner on this one? Does Kay have to vote for the punitive tax increase or look like she is going back on her earlier comments? It seems like a lose-lose proposition, and a good reason why Senators rarely become Presidents. For that matter, do Senators become Governors that often?
HUTCHISON: Yes. I do think that we should take action. I think they should know that we will take this action. And I think it should apply to others who are taking federal stimulus money, as well. When money is misspent, I think if our only lever is taxes, or maybe it is you return the money or you‘re out of a job, that‘s another piece of leverage that could be used. But I think this is something we can‘t just sit back and say, Well, we can‘t do anything about it. I think there are some things we can do.
BRZEZINSKI: All right. Let‘s pan back. Bottom line. Yes or no from you both. Senator Bob Menendez and Kay Bailey Hutchison, will that money from AIG—will those bonuses be recovered?
MENENDEZ: They‘re going to be recovered, 100 percent.
BRZEZINSKI: All right. Senator Hutchison?
HUTCHISON: I believe so, but I never want to predict fully anything that happens in Congress. But I do believe that the sentiment is there. We‘ve just got to find the legal way to do it, if they don‘t come up with a volunteer program, which would be my first choice.