Obama Orders Treasury Chief to Try to Block A.I.G. Bonuses

[houndawg]

Concessions were made by the UAW to help keep their jobs. I have no problem with the execs making concessions. In fact, I think they should offer to take less of the bonuses or waive them in total, but it should be their call not Congress.

I gotta agree with the distinguished gentleman from Georgia...apples and oranges, can't compare what the UAW did voluntarily (OK, there was pressure to keep their company alive, but they could have said no and rolled the dice) versus having COngress or the U.S. Treasury try to forcibly violate a legal contract...

I would love for a list of the AIG losers who got the bonuses leaked to the media...embarrass them folks...but some crazies would probably take it too far and try physical harm...

I'm not disagreeing, Colonel, merely pointing out that all this jive abut the sanctity of contracts was nowhere to be heard when Detroit was getting their bail-out. Then it was all about over-paid factory workers who didn't deserve the contract that they negotiated with management. See what I mean? In fact I still haven't heard about the non-executive salaried workforce in Detroit making concessions.

[SeattleGriz]

The part I'm not getting is where are these guys going to go if they don't get the bonus? That seems to be the position of AIG. If we don't pay them, they will find other jobs. With who? Who hires an employee that was a part of AIG needing 180 billion in taxpayer dollars?

[SeattleGriz]

After a little bit of thinking, I have come to realize the why AIG should get to give out the bonuses.

Here are my thoughts.

1. AIG is now owned 80% by the government.
2. What does the government do with screw up programs?
3. They throw money at them!!

This is par for the course as far as our government is concerned. I just can't wait for the AIG bonus union to chime in with some suggestions.

[houndawg]

Deport every one of them; we can outsource their gig for a fraction of the cost.

[UNI88]

Deport every one of them; we can outsource their gig for a fraction of the cost.

Congress, AIG or both?

One possible difference between the contracts (AIG & UAW) is that with the UAW contracts they were changing future wages while the AIG contracts were more likely for past performance. Not that the AIG execs deserved a bonus for their performance but what I don't know is if any of the bonuses were for agents and other lower level managers whose income is based largely on commission. If yes and these people met their performance objectives, denying them a commission after the fact would be more comparable to not paying a GM factory worker at the end of the week. Of course, if AIG had declared bankruptcy they would have been screwed anyway.

[Col Hogan]

I gotta agree with the distinguished gentleman from Georgia...apples and oranges, can't compare what the UAW did voluntarily (OK, there was pressure to keep their company alive, but they could have said no and rolled the dice) versus having COngress or the U.S. Treasury try to forcibly violate a legal contract...

I would love for a list of the AIG losers who got the bonuses leaked to the media...embarrass them folks...but some crazies would probably take it too far and try physical harm...

I'm not disagreeing, Colonel, merely pointing out that all this jive abut the sanctity of contracts was nowhere to be heard when Detroit was getting their bail-out. Then it was all about over-paid factory workers who didn't deserve the contract that they negotiated with management. See what I mean? In fact I still haven't heard about the non-executive salaried workforce in Detroit making concessions.

Yea, I too would like to hear more about what the executive and non-executive salaried workforce at GM and Chrysler have done to help make their companies more cost effective...I agree too much has been focused on the union workers (at least in the media)...

[Appaholic]

I guess I am the only one that thinks they should get the bonuses.

IF AIG was contractually bound to pay them then the Fed should leave it alone. If they go in and invalidate the contracts that guaranteed them in the first place then what would prevent them from doing to any contract they wanted to invalidate.

You're right...what would stop the Feds from invalidating the contract of any company it owns an 80% stake in? Nothing should IMO...

Maybe I'm too simplistic, but, 2 months after signing a contract lease with the owners of apartments, the owners went into foreclosure and the property was auctioned to another buyer who could pay the bills. That act alone negated all secondary contracts (like my lease) and the leases had to be renegotiated (at a higher rent). Now, by the same token, I could have left without signing another lease....why is this different....the day the government took an 80% stake, it became the new owners...I'm sure this makes too much sense, therefore, it is not feasible....

[OL FU]

Geithner: " I approved of the bonuses before I disapproved of them."

[Appaholic]

Geithner: " I approved of the bonuses before I disapproved of them."

Yeah.....he's not redeeming himself too much from the tax deal....the fact that Obama has come out in vocal support tells me he is probably on his way out.....really coming off as a flake...

[OL FU]

Geithner: " I approved of the bonuses before I disapproved of them."

Yeah.....he's not redeeming himself too much from the tax deal....the fact that Obama has come out in vocal support tells me he is probably on his way out.....really coming off as a flake...

Politicians always amaze me. Obama ran as a new kinda politician. Just think of the kudos he would have received if he had simply sad, WE MADE A MISTAKE IN VETTING BUT I AM NOT GOING TO HAVE A TAX CHEAT IN MY CABINET. Sorry Tim.

I think part of the problem is the feeling that people can't say I erred.

[AZGrizFan]

I'm not disagreeing, Colonel, merely pointing out that all this jive abut the sanctity of contracts was nowhere to be heard when Detroit was getting their bail-out. Then it was all about over-paid factory workers who didn't deserve the contract that they negotiated with management. See what I mean? In fact I still haven't heard about the non-executive salaried workforce in Detroit making concessions.

Yea, I too would like to hear more about what the executive and non-executive salaried workforce at GM and Chrysler have done to help make their companies more cost effective...I agree too much has been focused on the union workers (at least in the media)...

They stopped flying private jets to D.C. to beg for money. For the love of GOD and all that is holy, what MORE could you possibly ask from them?

[Appaholic]

Yea, I too would like to hear more about what the executive and non-executive salaried workforce at GM and Chrysler have done to help make their companies more cost effective...I agree too much has been focused on the union workers (at least in the media)...

They stopped flying private jets to D.C. to beg for money. For the love of GOD and all that is holy, what MORE could you possibly ask from them?

Yes.....and they're moving the shareholder's meeting from Delaware back to Michigan (you knowm, where the shareholder's might actually be able to participate)....haven't they given enough...?? Have a heart....

[houndawg]

Deport every one of them; we can outsource their gig for a fraction of the cost.

Congress, AIG or both?

One possible difference between the contracts (AIG & UAW) is that with the UAW contracts they were changing future wages while the AIG contracts were more likely for past performance. Not that the AIG execs deserved a bonus for their performance but what I don't know is if any of the bonuses were for agents and other lower level managers whose income is based largely on commission. If yes and these people met their performance objectives, denying them a commission after the fact would be more comparable to not paying a GM factory worker at the end of the week. Of course, if AIG had declared bankruptcy they would have been screwed anyway.

Exactly!

[BigApp]

I guess I am the only one that thinks they should get the bonuses.

nope, you're not the only one. If it's contractually obligated, then they're going to get it. This 90% tax bullshit is just that: bullshit. It's a modern day witch hunt.

And no, they shouldn't give it back. Ain't a soul on this board (or any board) who WOULD give it back if the bonuses were given to them.

[Grizalltheway]

I guess I am the only one that thinks they should get the bonuses.

nope, you're not the only one. If it's contractually obligated, then they're going to get it. This 90% tax bullshit is just that: bullshit. It's a modern day witch hunt.

And no, they shouldn't give it back. Ain't a soul on this board (or any board) who WOULD give it back if the bonuses were given to them.

So you're totally against wasteful government spending except when it makes the fat cats even fatter?

[OL FU]

nope, you're not the only one. If it's contractually obligated, then they're going to get it. This 90% tax bullshit is just that: bullshit. It's a modern day witch hunt.

And no, they shouldn't give it back. Ain't a soul on this board (or any board) who WOULD give it back if the bonuses were given to them.

So you're totally against wasteful government spending except when it makes the fat cats even fatter?

Maybe he believes that the government should negotiate the change prior to providing the money instead of negotiating (or taxing) after the fact.


The point is pretty simple. If you sign a contract you expect to get paid for the services provided. IF the company goes bankrupt every knows that payment is suspect. While it probably should be, the company is not bankrupt. The fault lies with those in the government that once again failed to do their job.

[wideright82]

So you're totally against wasteful government spending except when it makes the fat cats even fatter?

Maybe he believes that the government should negotiate the change prior to providing the money instead of negotiating (or taxing) after the fact.


The point is pretty simple. If you sign a contract you expect to get paid for the services provided. IF the company goes bankrupt every knows that payment is suspect. While it probably should be, the company is not bankrupt. The fault lies with those in the government that once again failed to do their job.

Another thing a lot of people do not understand is, what goes into these credit swaps. A lot of time the people working on them are being told by higher ups what to do and it is their jobs to make the math work, and to make the money. They may have ended up driving the company off the cliffs, but to say they weren't doing their jobs well, in my eyes, doesn't tell the entire story.

[travelinman67]

Senator: Obama aides sought bonus limit revision
Associated Press
March 18, 2009, 8:01PM

WASHINGTON — For a while, the disappearance of an executive bonus restriction from last month’s economic stimulus looked like sleight of hand worthy of a Las Vegas stage. No one could explain how the provision faded into thin air.

On Wednesday, Sen. Chris Dodd, D-Conn., acknowledged that his staff agreed to dilute the executive pay provision that would have applied retroactively to recipients of federal aid. Dodd, chairman of the Senate Banking Committee, told CNN that the request came from Obama administration officials whom he did not identify.

The provision was the subject of new attention this week because, had it survived, it would have prevented the American International Group Inc. from granting $165 million in bonuses to employees of its financial products division.

While the House and Senate reconciled their different stimulus bills last month, the Treasury Department expressed concern with a Senate restriction on bonuses, noting that if it applied to existing compensation contracts it could face a legal challenge.

“The alternative was losing, in my view, the entire section on executive excessive compensation,” Dodd told CNN. “Given a choice, this is not an uncommon occurrence here, I agreed to a modification in the legislation, reluctantly.”

An administration official said Treasury made Dodd’s staff aware of the potential for litigation but did not demand that the provision be removed from the final bill. The official spoke on the condition of anonymity because he was not authorized to discuss the matter in public.

"Give Obama a chance..." - Cap'n Cat 2009

[travelinman67]

Pelosi passes special tax bill to rescind money for AIG bonuses...

...before the fat lady even begins warming up...

Congress Invites Court Challenge With AIG Taxation Plan, Lawyers Say
Legal scholars warn that Congress could have a tough time defending itself in court if it tries to tax away the AIG bonuses.

By Judson Berger
FOXNews.com

http://www.foxnews.com/politics/first10 ... wyers-say/

Lawmakers outraged over the AIG bonuses have told the people who got the money to watch out -- the government will get it back one way or the other, even if it means taxing the heck out of their paychecks.

But legal scholars say Congress will have a tough time defending itself in court if it goes down that road.

Not only would Congress be retroactively meddling with contractual agreements, they say, but it would be passing laws that would essentially target a specific group of employees.

Jonathan Turley, George Washington University law professor, said targeting those employees through taxes would invite a valid court challenge.

"It could well trigger years of litigation," he said. "Just because a company or individual is unpopular does not mean the government can retroactively impose punitive measures against them. ... There's a host of difficult contractual and constitutional and statutory barriers that would have to be overcome by Congress."

Two of those difficulties, lawyers say, lie in Article I of the U.S. Constitution -- a section stating Congress cannot pass any "Bill of Attainder" or "ex post facto" law.

A Bill of Attainder is an act of the legislature that singles out and punishes a group or individual without trial. An ex post facto law retroactively changes the legal consequences of an act.

"It's a Bill of Attainder. It can't be done," Sen. Judd Gregg, R-N.H., told FOX News when asked about proposals in the Senate to tax AIG.

President Obama even warned Wednesday about the possibility of a costly court battle over the $165 million in bonuses.

[bobbythekidd]

It looks like Congress is going to stomp on our Constitution again.

[Col Hogan]

It looks like Congress is going to stomp on our Constitution again.

Yea, it's quickly becoming just an old piece of paper in the National Archive...instead of the bedrock of our laws...

[bobbythekidd]

I don't hold out much hope that the SC is going to kill this. So much for checks and balances.

[dbackjon]

I actually agree with you, BTK.

Use leverage on AIG, etc. But special laws are NOT the answer. I'd rather eat the bonuses, move on, and try to learn from the mistakes made.

[bobbythekidd]

I actually agree with you, BTK.

Damn. So much for that bait.

[dbackjon]

I actually agree with you, BTK.

Damn. So much for that bait.

:p

Besides, there are much bigger fish to fry - like while all these financial institutions that were bailed out are not lending...