Congress to strip AIG of bonuses

POLITICS - United States Senators are hopping mad over the insurance giant AIG executives who received $165 million in bonuses, using taxpayers' money that was meant as part of the bailout plan.

Senate Democrats vowed today to strip AIG executives of their $165 million in bonuses, as expressions of outrage swelled in Congress and in the mass media over a firm that received billions in taxpayer bailout funds.

"Recipients of these bonuses will not be able to keep all of their money," declared Senate Majority Leader Harry Reid on the Senate floor.

"If you don't return it on your own we will do it for you," said Chuck Schumer of New York.

Senate Democrats are now threatening to tax the bonuses at up to 91% through narrowly written legislation, said Schumer, if AIG does not return the money voluntarily.

Some feel 91% doesn't go far enough. In the United States House of Representatives, Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100% bonuses above $100,000 paid by companies that have received federal bailout money.

"It boggles my mind how these executives can be so unaware of what the American people are going through," said Tim Ryan. He called his proposal "a wakeup call that the days of arrogance and greed on Wall Street are coming to an end. We will use any means necessary."

The Internal Revenue Service currently withholds 25% from bonuses less than $1 million and 35% for bonuses more than $1 million.

On Monday, President Barack Obama lambasted AIG for "recklessness and greed" and pledged to block payment of the bonuses. Obama said he had directed Geithner to determine whether there was any way to retrieve or stop the bonus money.