Van Hollen: House Could Vote to Tax Bonuses Within Days

Posted March 17, 2009 at 2:57pm

Updated: 4:36 p.m.

The House could vote within days on legislation to increase taxes on bonuses passed out by companies receiving federal bailout money.

“I think we’ll probably move something in the next couple of days,— said Rep. Chris Van Hollen (Md.), chairman of the Democratic Congressional Campaign Committee.

Van Hollen said he expected the Ways and Means Committee to take action “as soon as possible,— with a bill quickly heading to the floor after that. Van Hollen said he supports legislation that would be broader than simply addressing the $165 million that American International Group has handed out. Van Hollen wants the remedy to address other companies that needed bailouts to recapitalize. The exact definition of who the new taxes would apply to is under discussion, Van Hollen said.

Rep. Richard Neal (D-Mass.), who chairs the Ways and Means tax-writing subcommittee, said one issue is distinguishing between banks that were solvent but forced to take federal money so they could increase lending and those who were bailed out to stay afloat.

“This has to be thought through comprehensively,— Neal said.

House Democrats aren’t the only ones planning to advance legislation, however.

A group of freshman House Republicans joined the chorus of angry lawmakers Tuesday by introducing a bill to change the way bailout funds are doled out.

In addition to getting back the millions of dollars given to executives at the AIG, lead co-sponsor Reps. Erik Paulsen (R-Minn.) and Leonard Lance (R-N.J.) said their bill would also prevent other companies that received bailout funds from giving out bonuses. It also would require the Treasury Department to “personally approve any contract personally that involves bonus payments— in the future.

Lance said the provisions in the bill were based on a letter he sent Monday to Treasury Secretary Timothy Geithner.

“I think it’s important that we recoup the money that has already been paid out by AIG executives,— he said.

“It’s not right for the administration to place its hands up in the air and say, We cannot do anything about what has occurred before,’— he said. “We need to work in a bipartisan way to make sure this does not happen again.—