Will the gentleman yield? Through the Chair to the gentleman from Ohio, I was not in the room that inserted the pro-AIG language into the stimulus. I thank the gentleman. Coming from the Great Lakes State, when I was younger I was always…
Will the gentleman yield?
Through the Chair to the gentleman from Ohio, I was not
in the room that inserted the pro-AIG language into the stimulus.
I thank the gentleman.
Coming from the Great Lakes State, when I was younger I was always fascinated with the history of maritime travel in our beautiful homeland. And so when I was younger, I saw a book, it was called The Phantom Freighter, it was a Hardy Boys mystery, and I read it. I loved how they worked through to find the motivations and to finally unmask the culprit, and eventually I read the whole series. It has kind of rekindled in me today that sense of wonder at who and why something was done, and to work through the mystery to find out: Who could possibly be the hidden hand behind the mystery amendment?
I commend my colleague from Ohio for his search to cut through the fog of our times to find that hidden hand that wrote the mystery amendment, and I will do everything I can to help him with this search, as I trust members of the media will.
Look, in many ways, because this was in the stimulus bill, it has stimulated a lot of reportorial interest in who actually did this. I think that we can assume that if you can unmask the culprit, there may very well be a Pulitzer in it for someone for doing so. But when we look at this, in all seriousness, what we have seen is a classic example of a rush to judgment causing problems.
Now, as a matter of civics, since the subject was broached, when the stimulus bill came to this floor with this amendment inserted into it, it was voted upon by the Members of the House. Not one Republican voted for a stimulus bill with this amendment in it, which means that every Republican voted against approving and protecting AIG's bonuses.
On the Democratic side, every Democrat that voted for that stimulus bill voted for that amendment that approved and protected AIG's bonuses. The President of the United States signed the stimulus bill that included the amendment that approved and protected AIG's bonuses into law. And now that the public is aware of the AIG bonuses, we have seen another rush to misjudgment where we turn the Tax Code into a penal code, where we shred the Constitution to use it as a political fig leaf, and set a heinous precedent in the future for other people who may be disliked or disfavored given the political mood of the moment.
In fact, one of the things, whether you agree with the Constitutional analysis or not, is this: This bill still allows the bonus recipients to keep 10 percent of their bonuses, and it doesn't do a thing to prevent the $30 billion that has already been committed to AIG from being drawn upon. I think that if we were going to do anything today, it should have been to get 100 percent of those bonuses to the taxpayers and prevent another dime going to AIG in bailout money. That is just me and 90-some others of my colleagues.
When we look at where we are today with the resolution of inquiry that the gentleman from Ohio introduced, I think I can establish the motive behind the hidden hand that wrote the mystery amendment. I do not believe that this was a mistake. I do not believe that this was simply a matter of venality for a hometown constituency. I think this was an actual matter of economic policy by this administration. If I may explain.
We heard from Mr. Liddy of AIG yesterday that he was very much afraid of losing the people who had caused the problem at AIG before they had managed to fix it. He believed that if these individuals left, he would see a meltdown again of AIG, which he believes would help create economic chaos throughout America.
I believe that, in consultation with individuals from the United States Government and potentially the Federal Reserve Board, he made the determination that these bonuses, retention bonuses were necessary to keep those people at AIG, facilitating what he believes is an orderly unwinding of the mess.
When viewed in the light of having to keep the people who created the problem so they could fix it before they left, this amendment makes sense. This amendment makes sense as a matter of policy, because on January 28, CNN's Mary Snow reported that AIG was expected to receive hundreds of million dollars, at least, in bonuses. That is out in the public realm.
You see, the Senators put forward their amendment to preclude the very types of bonuses AIG received. If you are looking at this as a matter of economic policy, you say to yourself: The AIG bonuses that are coming down the pike are not public. You say to yourself: The politicians in Congress are
not going to allow this to happen because the public is going to be apoplectic.
You see the opportunity in the stimulus bill with $1 trillion of spending being rushed through in the dead of night. You say to yourself, ``Oh, oh, the Senators have already put forward an amendment to preclude such bonuses. We are going to have to remove it, and we are going to have to put something in its place to approve, protect, and grandfather the AIG bonuses so we do not lose the, quote/unquote talent that produced the problem and that has to fix it.'' It now makes perfect sense. But having established the motive, we have yet to establish the culprit.
The public is apoplectic, as I said earlier, because they do not believe that as a matter of economic policy this amendment is fair to them; that it is patently inequitable, and they do not want the people who caused the problem to benefit from being propped up courtesy of billions of dollars of taxpayer money.
Now, the response in Congress is not to look at the economic policy to make the determination that AIG is too big to fix, that it should be wound down immediately, that taxpayers should be protected. Instead, as I mentioned earlier, we saw a political fig leaf put forward.
The mood was also reminiscent of what I experienced as a young man watching a very important artsy film called Animal House. We all remember the scene where they are sitting around Delta House drinking beer, bemoaning their horrible grades at the midterm exams, and Dean Wormer walks in. Immediately the members of Delta House start to hide their beer under their seats and in the back, and the dean looks at them and says, ``You know, drinking is illegal in fraternities here at Favor College.''
When the public found out about this bonus to AIG executives, when they found out what this amendment allowed and was voted for by a majority of this Congress and signed into law by the President of the United States, you saw the political equivalent of Delta House hiding their beer so Dean Wormer would not be upset. In the event Dean Wormer was not fooled, and neither has been the American public, they want to see the situation resolved; they want all the money back in those bonuses; they want to prevent more money going to AIG; and, as the gentleman from Ohio has pointed out, they want to find out who the hidden hand behind the mystery amendment was.
We talk about transparency in government, we talk about accountability in government, and you are telling me that we can't even determine who put this amendment into a $1 trillion spending bill that was approved by this Democratic Congress and signed into law by the President of the United States. I would hope that this inquiry becomes a bipartisan cause in the interest of answering that question for the American people.
I yield back to the gentleman from Ohio.
Thank you. To the Chair, how much time is remaining?
Mr. Speaker, one of the things that we want to make clear about the resolution of inquiry that was drafted and introduced by the gentleman from Ohio is that it is an attempt to get an answer for the American people, and what we want to do is be fair both in providing them the answer and in terms of the people who could be the mysterious hidden hand behind this amendment. We want to get to the bottom of it. We do not want to rush to judgment and cast aspersions on others. We believe that this would be very fair to all involved, especially someone like Secretary Geithner, who no one has said was in the room, who himself has not said whether he was or wasn't. We do not want to prejudge the situation. We would like and welcome Democratic support for this, because we believe that in many ways, the Democratic majority was as blindsided by this amendment as was anybody else.
Of course, we warned that it might take time to read the bill that you vote on, but in the end I truly don't believe that the majority of Democrats in this body supported and approved and wanted to protect the AIG bonuses. We have to be fair about that.
But what they do have the opportunity to participate in now is to get behind the resolution of inquiry so they can show their constituents that they want a fair, orderly process to get the answer to the question of who was the hidden hand behind the mystery amendment. We also would like to have the support of members of the general public who could participate in this and put forward their own theories of who was the hidden hand. If they chose to do so, they can e-mail me at Thaddeus at republicanhousepolicy.com with their theories on potential motives for this mystery amendment and who they believe could be the hidden hand.
As we have seen throughout this process, someone did this. Now I can understand why no one is rushing up to accept the, quote, ``credit'' for this fine and noble amendment; but we need to know. Again, we welcome Democratic participation and public participation.
But we should not let this opportunity pass us by to get to the bottom of this because the worse thing to happen would be for this to recur. I don't think that is in the interest of the American people, and I don't think it is in the interest of anyone who was elected to serve them in this Chamber. We are sent here to vote on important matters of the day. We are sent here to make very important decisions as employees of the sovereign American people, and they deserve to know what we are voting on because they have to go home and account.
When they don't know what they are voting on, and in many ways get caught in an honest mistake supporting a larger issue while another issue festers beneath the surface, they will be called to account for something that they had no way of knowing. The vast majority of Members wanted to know what was in the bill, and they were not given the time to do so. That is unfortunate. But let's get to the bottom of the mystery of the hidden hand so Members will know what they are voting on when a bill comes to the floor.
One of the things that we have to take into account is the next problem can be avoided. That's why again we welcome Democratic participation and we welcome public participation in getting to the bottom of who was the hidden hand.
In voting today, we have also seen a spillover consequence of what happens when government reacts in a crisis. There is the old joke that is too unfortunately true, is that when in a crisis, government will throw your money at something and hope it goes away. We now have the corollary that when a political crisis happens that threaten politicians, they will rush to judgment and they will take money away as quickly as they can to solve it. We need to break that.
I come from Michigan. We have an 11.6 percent unemployment rate. My constituents cannot understand an economic policy that pays people to stay in their jobs, especially when those were the people who caused the problem that cost them their jobs in the first place by creating a global credit crisis that brought us to the precipice of a global depression. They cannot understand the sanity behind the logic of keeping people who were smart enough to break something, as if they were smart enough to fix it and rewarding them for it. They cannot understand how people who got rich causing the problem are now going to be overcompensated for fixing the problem that they caused.
What they want is for us to be responsible. What they want in a time of economic chaos is for their subservient government to help reestablish order and equity to our economy. They want us to help build institutional trust again within the financial community.
This amendment in front of us today did more to undercut the attempts to restore public confidence in financial institutions than anything I can think of because when you go home, the reason people do not want to put their hard-earned money out there is for fear of losing their job and seeing their nest egg become smaller. They do not have faith in public and financial institutions that are proven no longer to be too big to fail, that appear to be too big to fix, and they are also very concerned that the economic chaos and institutional disorder that has affected them so direly in these past months is now being replicated by their Federal Government, a government that spends a trillion dollars in a rush to judgment, a government that talks about a $3.6 trillion budget, that talks about trillion dollar tax increases. This is chaos to my constituents.
And now we add to that the fact that amidst all the talk of trillion dollars, trillion dollars borrowed, spent, trillion dollars taxed, they find out that no one in their government can tell them who wrote the amendment that let AIG executives receive bonuses. They deserve better than this. They deserve an answer because the first thing we have to do in the wake of this AIG bonus disaster is restore public confidence in the one institution they look to to help provide order and sanity and equity within their lives in times of chaos, and that is their Federal Government. Let us not fail them again.
I yield back to the gentleman from Ohio.
On your line of thought regarding the sanctity of contracts, in many ways we heard that these contracts here could not be voided, that the sanctity of contracts prevailed.
The reality is this amendment was necessary because the sanctity of contract ``ended'' when a company that would have gone bankrupt but for taxpayer money being injected to save it occurred. That is why this amendment was necessary for precisely the reasons you talk about.
When you look at the disparate treatment of auto workers who have to give up hard-earned, negotiated contractual benefits in exchange to show viability for taxpayer bridge loans, when you talk about responsible lenders having to foot the bill for people who have even lied on their mortgage applications to be bailed out while mortgage contracts are crammed down and rewritten, they cannot abide a company that says we have a sanctity of contract when the reality is there would have been no bonus, no contract if they had gone into bankruptcy. Again, as you have pointed out, but for the Federal taxpayers, the American people's hard-earned savings going in to bail that company out, a company that has not been asked to restructure but to wind down, those contracts were no longer void.
And it also shows the point that had this Congress known, both Republicans and Democrats, I believe, would have demanded that any further bridge-loan assistance to a company, a financial institution, had to have as an attachment, as a precondition, the preclusion of any executive compensation in the terms of a bonus.
Again, we were not allowed that opportunity because in the dead of night, this mystery amendment was offered by a hidden hand.