By Congressman Joe Pitts

Political grandstanding is nothing new in Washington D.C., but the recent vote to retroactively tax bonuses of AIG executives was grandstanding at its worst, because the bill will simply cover up a problem rather than fix it.

I am appalled and outraged that AIG employees received millions of dollars in bonuses.  Their company is being propped up with $182 billion of taxpayer money.  Bonuses hardly seem to be warranted.  But I voted against the flawed bill that would have retroactively taxed the bonuses (H.R. 1586) because it was nothing more than political cover for the politicians that have allowed this to happen.

The bill itself was constitutionally suspect.  The bill was clearly meant to punish AIG executives, which most likely makes it unconstitutional as bills of attainder are prohibited in Article I, Section 9 of the Constitution.
 
Retroactive taxes are not good public policy either. But don’t take my word for it.  Just two days before the bill came to the floor, Rep. Charles Rangel (D-NY), Chairman of the House Ways and Means Committee, had this to say about such a tax: "There is some concern that I have that people will lose credibility in the income tax system and think of it as a political weapon rather than a revenue raiser.”  He went on to call a proposal to retrieve the bonuses through the tax code as “a venting type of thing."  These are strange words coming from the man who ended up writing the bill.
 
I believe we should get 100 percent of the taxpayer’s money back, not just the money for these bonuses.  The bonuses are a symptom of a larger problem—the government bailing out irresponsible behavior and using taxpayer money to prop up failing private enterprises.  A constitutionally suspect, retroactive bill of attainder is not the answer.  Two wrongs do not make a right.

The bill was hastily written, rushed to the floor, and full of loopholes.  Many of the people receiving the bonuses live abroad and most likely wouldn’t be subject to an income tax.  And it was written in a way that will punish executives at AIG for receiving bonuses, but won’t affect bonuses at Merrill Lynch, another company with billions of dollars in taxpayer bailout money.

This bill was nothing more than political cover.  Secretary Geithner engineered the AIG bailout and knew of these bonuses ahead of time.  For all intents and purposes, the government owns AIG, so it’s a little strange to hear the Obama Administration railing about the poor management decisions that led to these outrageous bonuses.  A provision was removed from the so-called stimulus bill in the Senate that would have barred such bonuses from happening.  It was removed at the behest of the Obama Administration. In light of his botched handling of this issue, and the banking issue at large, I think Secretary Geithner should resign.
 
Yet, as outrageous as these bonuses are, it would be a mistake to allow them to distract us from the greater problem.  The government has put up hundreds of billions of dollars in taxpayer money to prop up failing businesses, and there is no end in sight.  For a politician that used the term exit strategy to great effect during the election, I ask the President, where is your exit strategy to remove the American taxpayer from the mess called AIG?

This legislation was rushed to the floor, with less than an hour of debate and shoved down the throats of Representatives, all in a cynical attempt to divert attention from the truth that politicians in Washington made these bonus payments possible in the first place.  This legislation sets a terrible precedent and most likely violate the Constitution, which should still stand for something around here.

Congressman Joe Pitts represents the 16^th Congressional District of Pennsylvania.

###