Stimulus bill seeks to recover Wall Street bonuses (AP)
WASHINGTON – Financial institutions that received federal bailout money and paid large executive bonuses would be required to compensate taxpayers under the economic stimulus bill approved by the Senate.
The $838 billion measure includes an amendment penalizing companies that paid bonuses greater than $100,000 to executives after receiving government rescue funds last year. The amendment would require the companies to repay within four months any portion of the bonus above $100,000 or face an excise tax of 35 percent on the portion of the bonus above $100,000.
The Senate approved the stimulus bill 61-37 on Tuesday, setting up negotiations with the House, which passed a slightly different version last week.
“It should have gone without saying that the bailout money was never intended for employee bonuses, but once again financial institutions have taken advantage of lax regulation and the public trust,” said Sen. Ron Wyden, D-Ore., who co-sponsored the amendment with Sen. Olympia Snowe, R-Maine.
“The American people are demanding that these firms get serious about getting our economy back on track,’ Wyden said. “Congress has to show that it is willing to step in until they get the message.”
Snowe, one of just three Republicans to back the stimulus bill, said the financial bailout Congress approved last fall “left open an escape hatch of golden parachutes for top executives on Wall Street, the same individuals whose careless mistakes hurt the financial system and forced taxpayers to foot the bill in the first place.”( Matthew Daly-Associated Press-2-10-‘09)
Bonuses are traditionally paid by a company for the good work for a particular year, for all those who were instrumental (from the workforce, including CEOs) in gaining profits, but not for mismanaging the company’s fiscal health and eroding the public trust by bad practice and policies of a few at the top. To give the irresponsible, bonuses would send wrong message all around.