To amend the Internal Revenue Code of 1986 to impose a tax on bonuses received from companies receiving TARP funds.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1586) to impose an additional tax on bonuses received from certain TARP recipients.

First of all, Mr. Speaker, I want to thank Congressman Peters, Congressman Israel and Congresswoman Maloney for coming together and working with the committee to see how, the best we could, right a wrong.

Most all Americans believe that a bonus is something that is paid as a reward for a job well done. And certainly we don't believe in the House that when a handful of people receiving taxpayers' money for threatening the community in which we live, and indeed our country and the financial structure of the world, the whole idea that they should be rewarded millions of dollars is repugnant to everything that decent people believe in. But notwithstanding that, it is not our job to tell the private sector what to do; it is our job to say you don't do it at taxpayers' expense.

All this bill does is just pull out that part that they called bonus. And if you received, or the company received, $5 billion of taxpayers' money, we say the tax that you will pay on this is 90 percent. The rest of your income would be at the regular rate of 35 percent. If, indeed, this combination of the so-called bonus reward is combined with the regular salary and reaches a cap of $250,000, only the regular 35 percent would count.

Maybe somewhere along the line someone might say, ``I don't deserve this, we've caused enough damage, people have lost their jobs, their savings, they've lost their homes, their health insurance, they've lost their dignity, they've lost their pride, and we don't deserve to take this money from the taxpayers.'' Then give it back, don't receive it, and the law certainly would not apply. But if you're proud of what you've done, we are saying the buck is going to stop here, the red light is flashing. And anyone thinking about doing this, we say you just pay your dues to the IRS because we're going to be watching this.

Mr. Speaker, we're not trying to punish anybody, we just say do what you have to do. Rewards are subjective, but you don't do it with taxpayers' money.

At the end of the day, I do hope that this will be a message that will be sent in a bipartisan way. We may have differences in how we resolve this problem in the future, but this problem is there, and we are saying to the IRS and to the commissioner that we really want to make certain that, at the end of the day, they're not the ones that caused the problem and then get rewarded for it.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, let me try to answer a couple of questions.

Whatever point the minority leader was making as to what happened in the Senate bill, he should have an inquiry and do whatever he has to do. I can say, as a conferee, that issue never was in conference.

Having said that, it doesn't mean whatever he comes up with with his inquiry that these people deserve to have these bonuses at taxpayer expense. And that's the issue before the floor. It has nothing to do with what was in conference. It has everything to do with, do these people deserve, at taxpayers' expense, to receive these types of bonuses?

The second thing is that, while it's only 90 percent Federal, there is local and State liability, and they're entitled in their 10 percent to take a look at that and make the decisions that they have to.

Mr. Speaker, I want to now yield 1 minute to my friend and colleague from New York, Congressman Israel.

Let me thank my leader, the ranking Republican on the committee, for pointing out that this is, and I agree, an extraordinary procedure. And I've given a lot of thought to it. And it just seemed that this is an extraordinary situation when President Bush and Secretary Paulson would come to the Congress and ask for $700 billion of taxpayers' money, and if we didn't do it in a week or two, the sky would fall not only in the United States but around the world. If, indeed, people among that group of people, who without regard to the people that we were trying to protect, take this money, then it calls for an extraordinary response to it.

So I feel very, very comfortable in saying we tried to look at the arsenal that we had, whether it's the Justice Department, the Finance; the American people demand protection, and that's what we're doing today with your help.

Mr. Speaker, I would like to call on a senior member of the committee, my friend from Michigan, Congressman Levin, for 1 minute.

(Mr. LEVIN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, as chairman of the Ways and Means Committee, I've taken a deep breath and am now relaxed. I have reviewed this thing, and I am going home saying we have got the taxpayers' money back. And our colleagues and friends and those who love America as much as I do are saying, hey, slow down, we've got to make an inquiry.

You make your inquiry; we're going to do what we have to do.

Mr. Speaker, I am pleased to present a young man that is a freshman who hasn't been here that long but he came here with a feeling about what is moral, what is just, and the committee appreciates his advice on this bill, Representative Peters from Michigan, for 1 minute.

Madam Speaker, it seems like my friends on the other side got the wrong bill. If you want support for an inquiry, let's talk about it.

We want the taxpayers' money back, no matter who is wrong. So talking about the inquiry, we are talking about recouping the taxpayers' money.

I yield to my friend, Mr. Blumenauer, from Oregon.

Well, there is no constitutional challenge here, I can assure you. But one thing may be clear, I may be supporting an inquiry as to who did the stimulus, schpimulus.

The people want to know, are these guys going to get away with what they have done to our communities, what they have done to our homes, what they have done to our pride, what they have done to our country, and what they have done for the world?

So when the score is taken, it is going to be those who voted for the bill and those who voted against it. And that's it. You can go on with your inquiry, but this bill is abundantly clear, and the question is which side are you on?

I yield 1 minute to the distinguished member of the Ways and Means Committee from Florida, Representative Meek.

(Mr. MEEK of Florida asked and was given permission to revise and extend his remarks.)

Let me say to my friend that you have to look at me and read my lips.

This issue was not before the conference committee. Now, it may have been on the other side.

And after I say that, I am telling you that this has nothing to do with this being the right time to correct anything that you allege is wrong. These people are getting away with murder. They are getting paid for the destruction that they have caused our communities.

And before we leave here, we have to decide not what they did on the other side, because no one back home was asking about the conference report, they are asking, ``Are these people going to take away bonuses that taxpayers have paid for?''

And I think that Danny Davis, the gentleman from Illinois, might be in a better position to explain our position in the majority, for 1 minute.

May I inquire as to the time remaining on both sides?

Mr. Speaker I would like to yield to a distinguished member of the Ways and Means Committee, Mr. Etheridge, 1 minute.

(Mr. ETHERIDGE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1 minute to the gentleman from Alabama (Mr. Davis).

I would like to yield 1 minute to the gentleman from Colorado (Mr. Polis).

I certainly wish I'd heard the Republican freshmen proposal before, because we really wanted to get a bipartisan solution to this problem.

I yield 1 minute to the gentleman from Illinois (Mr. Hare).

At this time I'd like to yield 1 minute to a person that was one of the prime movers in this concept, the gentlewoman from New York (Mrs. Maloney).

Mr. Speaker, I yield 1 minute to the leader of our Democratic caucus, indeed, a leader in the Congress, the gentleman from Connecticut (Mr. Larson).

Let the church say ``amen.''

I would like to yield 30 seconds to Congressman Kratovil from Maryland on this subject.

I thank the remarks of the other side, and I appreciate and have a great deal of respect for those Members that want to inquire about how these contracts came about, who knew what, and when did they know it.

The Ways and Means Committee has no jurisdiction over these questions, whether they are valid or not. The real question is, do you really believe that people who did this damage to our families, to our community, to our country and, indeed, the world, deserve a bonus? If you want to know whether it is 90 percent or 100 percent or whether the State or local governments get the 10 percent, that is another question.

We are not always right, but what we are saying is that the American people do not want their taxpayers' money paying for bonuses for people who have caused such destruction, and to that we have unanimity.

So at the end of the day, when we put this on the suspension calendar, it is because we didn't think it was controversial. We didn't think it was a Democratic idea or a Republican idea. We thought you felt the frustration of your constituents in saying stop the thievery at taxpayers' expense.

Now, this has been going on. No one can deny this will not happen. I urge you to vote for this bill for the American people.

Mr. Speaker, I rise today with pitchfork in hand to take back from the executives at AIG, monies that rightfully belong to the taxpayers of this country. I urge my colleagues to support H.R. 1586.

The understanding that most Members of Congress had when we passed the TARP legislation was that these measures were necessary to keep our financial system from collapse. I believe the term is systemic risk.

We then voted last month for another economic recovery package of over $700 billion dollars which contained language that limited executive compensation for companies that received certain TARP funds.

It appears that the AIG executives may not have broken the law but certainly the spirit of the law. In other words, if AIG has received over $190 billion in funds from the federal fiscal coffers in the last year, the company is acting in broad contravention of the essence of the law to use $165 million of that for bonuses. The country is now $12 trillion dollars in debt after passage of last month's American Recovery and Reinvestment Act of 2009. We literally cannot afford irresponsible uses of taxpayers' dollars.

Last September, the House and Senate voted on one of the most extraordinary pieces of legislation in the history of our country. During the same time, the federal government loaned the American Insurance Group (AIG) $85 billion, as the company could no longer access credit to fund its day-to-day operations. In addition, an economic ``bailout'' package enacted in October (PL 110-343) provided a total of $700 billion in federal aid to financial institutions to remove ``toxic'' debts and infuse capital into the credit market.

AIG has now received more than $180 billion in taxpayer money and is now nearly 80 percent owned by the government. As part of a restructuring plan announced by the Treasury Department earlier this month, AIG is set to receive an additional $30 billion in federal rescue aid.

The news that AIG paid $165 million in retention bonuses, including bonuses of at least $1 million each to 73 employees who worked in the financial products division that contributed to the company's troubles, has incited fervor among lawmakers and the public over the past week. Eleven of those top bonus recipients--including one who received $4.6 million--have since left AIG. If these payments were intended to motivate them to stay with the company it truly scares me to think what they might have needed to stay--$1 million not being enough.

Edward M. Liddy, the chief executive of AIG--selected in consultation with the Treasury Department after the first large infusion of government assistance--testified before a House Financial Services subcommittee that he has called on employees who received in excess of $100,000 to give back at least half of their bonuses, but which he also said are a legal obligation of the company. The reason that Mr. Liddy was selected is because he was expected to have the common sense as well as the financial sense which his job now entails.

Over two million Americans have lost their jobs in the last four months. Many of them still owe taxes from last year and will not get a stimulus check, TARP payment or waiver to pay those taxes. Neither will they have access in many cases to teams of topflight lawyers from swanky law firms to defend this excess that reminds me of the biblical tale of Sodom and Gomorrah.

Previously, Merrill Lynch paid $3.6 billion in bonuses days before its merger with Bank of America to avoid collapse. Bank of America, which acquired Merrill Lynch on January 1, 2009 received $45 billion in bailout money, some of which it used to acquire.

I was pleased to learn that Oversight and Government Reform Committee Chairman Towns sent a letter to Bank of America's chief executive last week asking for details on the bonuses. It appears they are ready to comply with Chairman Towns's request.

Treasury Secretary Timothy F. Geithner sent a letter about the AIG matter to lawmakers this week saying the Treasury Department will ``deduct from the $30 billion in assistance an amount equal to the amount of those payments.''

This bill taxes bonuses given to individuals at a rate of 90 percent--if their employer received more than $5 billion in federal assistance under the Troubled Asset Relief Program (TARP). It applies to individuals whose total family adjusted gross income exceeds $250,000 per year, and affects bonuses received after December 31, 2008.

Employees or former employees of covered TARP recipients would face a tax on their income minus the TARP bonus as determined by existing tax code, plus a 90 percent tax on the bonus. The term ``TARP bonus'' is defined by the bill to include any retention payment, incentive payment, or other bonus that is in addition to the amount paid to the individual at a regular rate, but it does not include commissions, welfare or fringe benefits, or expense reimbursements.

Employees who waive their entitlement to the bonus payments, or return them to their employers before the close of the taxable year, would not face a TARP bonus tax.

This exemption would not apply, however, if the employee receives any benefit from the employer in connection with a waiver or return. Any reimbursement of the tax by a TARP recipient would be treated as a TARP bonus to the taxpayer.

The TARP recipients that are covered under the bill include any entity that received, after December 31, 2007, capital infusions exceeding $5 billion under the financial industry ``bailout,'' as well as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). It would also apply to members of affiliated groups or partnerships with more than 50 percent of the capital or profits owned by TARP recipients. Any tax increase as a result of the measure would not be treated as income tax for purposes of determining the amount of any credit against the alternative minimum tax.

Mr. Speaker, I urge this body to seek redress from AIG with this strong piece of legislation so that we may get on with the business of moving our economic recovery forward.

The power to tax is the power to destroy. I will support destroying this creeping socialism imposed on us by the Bush administration before it takes over our entire economy. Executives and boards of private companies must know that to call in the Federal cavalry means that you will be run out of town when you misbehave.

Businesses beware. You do not want the Federal Government or the American people owning your business. We will hunt down your executives with pitchforks, we will subpoena your boards and haul you before Congress, we will use personal rhetoric to decry your greed, we will make life miserable.

And no, our cruelty will not be reserved just for your executives. Your workers will be bureaucratized, your competent managers squeezed out, your conferences and travel canceled.

I am proud to support this bill, and hope that it serves as a siren call to executives, shareholders, and workers to oppose nationalization of your companies.

In voting for this bill today, Mr. Speaker, we are demonstrating that there is a fate worse than death, and this is it. And if your business might be ``too large to fail,'' then, by all means, spin off divisions and downsize, because too big to fail seals a purgatory stay of abject misery.

Pillage not our public troughs yet ye be pillaged.

The power to tax is the power to destroy. I will support destroying this creeping socialism imposed on us by the Bush administration before it takes over our entire economy. Executives and boards of private companies must know that to call in the federal cavalry means that you will be run out of town when you misbehave.

I am reminded of Emperor Alexius I of Byzantium, who called forth the Christian kings of western Europe to help him hold off the Turks at his gates. Help us, he said, prevent the heathens from taking the holy land.

The Christian kings of the west responded in force. At first the crusades served Alexius's goals. But with time many crusaders saw a richer and easier target in Constantinople itself, and the hordes from the west looted the very emperor's domain who had called them forth.

Businesses beware, you do not want the federal government or the American people owning your business. We will hunt down your executives with pitchforks, we will subpoena your boards and haul you before Congress, we will use personal rhetoric to decry your greed, we will make life miserable. And no, our cruelty will not be reserved for your executives. Your workers will be bureaucratized, your competent managers squeezed out, your conferences cancelled, your work hours extended, your incentive structure turned upside down. I dare say that with a different party in the white house and congress as is unfortunately the case from time to time, your union will be busted and your jobs lost.

I will be supporting this bill, and hope that it serves as a siren call to executives, shareholders, and workers to oppose nationalization of your companies. In voting for this bill today, Mr. Speaker, we are demonstrating that there is a fate worse than death, and this is it.

And if your business might be ``too large to fail'' then by all means please spin-off divisions and downsize; because too big to fail seals a purgatory stay of abject misery.

Mr. Speaker, the power to tax is the power to destroy. Today I rise in support of H.R. 1586 and destroying the creeping socialism imposed on by the Bush Administration before it takes over our entire economy. Executives and boards of private companies must know that to call in the federal cavalry means that you will be run out of town.

I am reminded of Emperor Alexius I of Byzantium, who called forth the Christian kings of Western Europe to help him hold off the Turks at his gates. Help us, he said, prevent the heathens from taking the holy land.

The Christian kings of the west responded in force. At first the crusades served Alexius' goals, there were some initial ``bonuses'' such as the taking of Antioch and Jerusalem. But with time many crusaders saw a richer and easier target in Constantinople itself and soon the very forces that Alexius called forth looted his own capital and hastened the demise of the Byzantine Empire.

Businesses beware: You do not want the federal government or the American people owning your business. We will hunt down your executives with pitchforks, we will subpoena your boards and haul you before Congress, we will use personal rhetoric to decry your greed, we will make life so miserable that you will leave. And no, our cruelty will not be reserved for your executives. Your workers will be bureaucratized, your competent managers squeezed out, your travel and conferences cancelled, your work hours extended, your incentive structure turned upside down. I dare say that with a different party in the White House and Congress, as unfortunately happens from time to time, your union will be busted and your jobs lost.

I will be supporting this bill and hope that it serves as a siren call to executives, shareholders, and workers to oppose nationalization of your companies. By voting for this bill today, Mr. Speaker, we are demonstrating that there is a fate worse than death, and that this is it.

And if your business might be ``too big to fail'' then by all means, please spin-off divisions and downsize because ``too big to fail'' means that you will end up in this eternal purgatory of misery, blame and scapegoating.

Let your companies die quietly, silently, and call forth not the mighty crusaders from Washington DC lest we loot and pillage your company as the Christian crusader innocently called forth by Alexius I went on to loot the center of eastern Christendom itself.

Pillage not our public troughs lest ye be pillaged.

Mr. Speaker, at this time I yield 1 minute to the distinguished minority leader.

Mr. Speaker, I yield myself 2 minutes.

Frankly, the chairman of the Ways and Means Committee and I agree that bypassing the committee is a dangerous way to legislate. That invites unnecessary errors, and I think the stimulus bill is proof positive, and that's why we are here today. But again we are faced today with a bill that has had no public scrutiny and has not come before the Ways and Means Committee. Mr. Speaker, let us do our jobs.

When Congress acted to stave off an imminent financial and economic collapse, the results of which would have been Depression-era unemployment levels, we did so with faith that past and current administrations would carefully manage the people's money. That trust has been shattered. Lesson learned.

What has been particularly troubling is the difficulty with which the truth has come out recently. After many varying and contradictory excuses, we now know that the Obama administration, working behind closed doors, secretly eliminated provisions that would have prevented the appalling abuse of taxpayer money. Adding insult to injury, they explicitly protected bonuses at companies that in many cases are operating only due to the generosity of the American people. It's a breach of the public trust that should have the Treasury Secretary, who repeatedly failed to pay his own taxes, looking for a new job.

Several of my colleagues on this side of the aisle and even Chairman Rangel have noted good reasons to oppose the bill before us. It's an extreme use of the Tax Code to correct an extreme and excessive wrong done to the American people. I'm sure we'll hear today that two wrongs don't make a right. But neither does inaction. It is our duty to protect and defend hardworking tax-paying Americans. At the end of the day, this insult to taxpayers cannot, should not, and will not stand, and I urge my colleagues to vote for the measure.

Mr. Speaker, I yield 1 minute to a distinguished member of the Ways and Means Committee, the gentleman from California.

I yield 1 minute to the distinguished gentleman from Nebraska.

I yield 1 minute to the distinguished gentleman from Texas (Mr. Gohmert).

I yield 1 minute to the distinguished gentleman from Indiana (Mr. Burton).

At this time I yield 1 minute to the distinguished gentleman from Texas (Mr. Burgess).

I yield 1 minute to a distinguished member of the Ways and Means Committee, the gentleman from Texas (Mr. Brady).

At this time I yield 2 minutes to the distinguished gentleman from Indiana (Mr. Pence).

(Mr. PENCE asked and was given permission to revise and extend his remarks.)

I yield 1 minute to the distinguished gentleman from New Jersey (Mr. Lance).

I yield 1 minute to the distinguished gentleman from Arizona (Mr. Flake).

I yield 1 minute to the distinguished gentleman from Florida (Mr. Stearns).

(Mr. STEARNS asked and was given permission to revise and extend his remarks.)

I yield 1 minute to the distinguished gentleman from Georgia (Mr. Gingrey).

Mr. Speaker, I yield 1 minute to the distinguished gentlewoman from Minnesota (Mrs. Bachmann).

I yield 1 minute to the distinguished gentleman from Utah (Mr. Chaffetz).

I yield 1 minute to the distinguished gentleman from Arizona (Mr. Shadegg).

I yield myself the balance of our time.

Mr. Speaker, just briefly. We have a chance today to do the right thing by those who acted right, those who went to work every day, paid their taxes, and did nothing wrong, and that is the American taxpayer. This is their money, and we should get it back. I urge support for this legislation.

I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker and my colleagues, I caught a little grief 5 weeks ago when we had the stimulus bill on the floor. Remember the 1,100-page bill that no one had time to read and then no one did read? Obviously, the President didn't have time to read it either, because in that bill was this one sentence, this one sentence that made it clear that someone knew that these AIG bonuses were about to be paid, and they didn't want them stopped. So somehow in the dark of night, this one sentence was added to the bill so that AIG would pay these bonuses to their executives. This language wasn't in the House bill. This language wasn't in the Senate bill. This language showed up in the dead of night, and no one got to see it.

I'm wondering where did the language come from. Who wrote it? Who asked the conferees to put it in the bill? What conferees on the part of the House agreed to this? I'm looking for somebody to put their hand up. That's the whole issue.

This political circus that's going on here today with this bill is not getting to the bottom of the questions of who knew what and when did they know it? Somebody was responsible for drawing up this language. Someone brought it to the conferees. Someone brought it to the Democrat leadership, who wrote this bill in secret, and put this language in there. But we have no idea who it was.

Secondly, the bill that's before us attempts to recoup 90 percent of these bonuses. Why 90 percent? The American people are outraged. I'm outraged. And we just voted down an opportunity to bring a bill to the floor from our freshmen Members that said, real simple: We ought to get 100 percent of this money back. We can get 100 percent of it back because the Treasury Secretary has the ability to get it all back. The administration has the ability to get it all back. Why don't we just get it all back? And why are we bringing this bill to the floor today to give Members political cover when, in fact, the Treasury Secretary has the authority, the administration has the authority, to get all of it back? But, no, that got voted down. Our bill would have been a better bill.

Thirdly, our colleagues Mr. LaTourette and Mr. McCotter have introduced a resolution of inquiry to get all of the documents surrounding communications between the Treasury, the Fed, and AIG to understand who was in the middle of this conversation. People have known about this for months, and yet we just found out about it over the last 48 hours. So we want this resolution of inquiry to be passed by the committee. We want to get to the bottom of all of this. But in the meantime, do we have to have this political charade of bringing this bill out here? I don't think so.

I think this is a bad bill with bad consequences. We didn't see the bill until last night. Nobody in the committee marked it up, nobody debated it, and nobody understands the consequences of what we're about to do. How can we possibly vote ``yes'' on a bill like this?