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Tuesday, March 24, 2009

Bonus Bill Buried In Senate... For Now

The US House of Representatives, led by House Speaker Nancy Pelosi, reacting out of anger and in a rush, passed a bonus bill that would have targeted a specific group of individuals, blindly reacting to public anger over $165 million in bonuses paid to AIG execs, after the government bailed the company out, yet again, with $30 billion.

The Senate, seeing Obama's reaction and indicating he thought it was a bad idea, have backed away from the Pelosi bill and for now, have buried it.

From The Hill:

President Obama and Senate Democrats have buried a bill passed last week by the House that would have heavily taxed executive bonuses at bailed-out firms.

Despite the public outcry over $165 million in bonuses awarded at troubled insurer AIG, Senate Majority Leader Harry Reid (D-Nev.) showed little inclination Monday to bring the explosive issue to the floor this week or next. Instead, Reid is likely to delay action on executive compensation until late April, after the Senate returns from a two-week recess starting April 4.

The lack of enthusiasm to expedite the bonus legislation comes after Obama said over the weekend that he didn’t think it was a good idea for Congress to target individuals with tax proposals.

“As a general proposition, I think you certainly don’t want to use the tax code … to punish people,” Obama said in the interview with “60 Minutes” that aired Sunday.

Reacting to a frenzy of media coverage, the House last week passed a measure that would levy a 90 percent tax on bonuses received this year by executives at AIG and other companies collecting more than $5 billion in federal aid.

Sad state of affairs when our congress starts passing bills in a rush and out of anger trying to play to what is popular instead of what is right, even going as far as to pass a bill that is unconstitutional.

Wapo is on this story as well:

Jarred by a cool reception from the White House and fears of unintended consequences across the financial world, Senate leaders are likely to delay until late next month legislation to punitively tax bonuses at banks and investment firms that receive federal aid.

Obama has been waffling, which is probably why Pelosi thought she could get away with something this outrageous without thought to the consequences around the whole financial sector, but one he calmed down and started dealing with the realities, he finally called it a bad idea, yet he never said he wouldn't sign it.

Talk about hedging your bets!