Lawmakers Fear Too Quick a Response to AIG Bonuses

Posted March 18, 2009 at 3:40pm

House Democratic leaders are making progress in moving legislation aimed at recouping executive bonuses taken by recipients of taxpayer bailout funds, but even some within their own party think they may be moving too fast.

At the direction of Democratic leaders, the Judiciary Committee on Wednesday passed a newly drafted bill that authorizes the attorney general to recover past and future “excessive— bonuses made by companies that received federal bailout dollars.

Action on the bill represents Congress’ first response to the universal outrage at American International Group for giving $165 million in bonuses as it takes billions in taxpayer-funded aid. But Republicans and even some Democrats say the bill, which was drafted Tuesday morning and filed last night, needs more review.

Judiciary member Mel Watt (D-N.C.) said he “may be about to incur the wrath— of Democratic leaders for saying so, but he has “serious reservations— about the bill’s constitutionality and the lack of analysis done on the measure.

“I just don’t think we have the authority to do this,— Watt said. “I will not be able to vote for this bill.—

Judiciary members Bobby Scott (D-Va.), William Delahunt (D-Mass.) and Zoe Lofgren (D-Calif.) said they, too, worry that the bill is moving too quickly and may not be narrow enough to have its intended effect.

“I think this is a mistaken effort, although I know it’s well-intentioned,— Lofgren said.

Republicans on the committee also aired concerns about the speed with which the bill was being put together, arguing haste is what allowed for the excessive bonuses to happen in the first place.

The bill is —ill-conceived, probably unconstitutional and clearly designed to appease the public,— Rep. Darrell Issa (R-Calif.) said.

Judiciary Chairman John Conyers (D-Mich.) said it was “unavoidable— that Democratic leaders would move the bill so quickly because of the nature of the problem. He said the bill will likely reach the floor next week and vowed that something like this “won’t happen again— in his committee.

The committee passed the bill on a voice vote. At least one GOP aide said the lack of a recorded vote bodes well for Republicans, who may not like the bill but would feel obligated to vote for it if it’s the only AIG-related measure that makes it to the floor.