A bill to punish recipients of AIG bonuses has passed in the U.S. House of Representatives. "We're going to tax all those executives who received TARP bonus money, ninety percent of what they received," says Wisconsin Congressman Ron Kind , describing the measure as a "clawback provision."
Kind says the angry reactions in Congress are a response to what he calls a "complete moral vacuum" on Wall Street. "They have to have internal control mechanisms in place. They have to start exercising better value judgments on what they're doing with the money, or there's going to be a backlash." There have been some concerns that punishing AIG's "bonus babies" will lead them to quit, when they're needed to help untangle the complicated financial schemes they set in motion. "There are many people on Wall Street who have lost their jobs recently, who are just as capable of doing the job as those receiving the bonuses," says Kind. "I'm not too worried about that."
The bill passed the House on a vote of 328 to 93. The Senate Finance Committee is preparing similar legislation. Wisconsin Republican Jim Sensenbrenner voted against the bill, predicting the clawback would be overturned by the courts.