Democrats line up bills to strike at AIG

WASHINGTON, March 17 (UPI) -- Congressional Democrats lined up Tuesday behind U.S. President Barack Obama's vow to claw back bonus pay given to American International Group Inc. executives.

On Tuesday, Senate Democratic leader Harry Reid, of Nevada, joined the call, announcing Sen. Max Baucus, D-Mont., head of the Senate Finance Committee, would propose a bill to recoup billions within 24 hours of its passage, the Politico reported.

"Recipients of these bonuses will not be able to keep all of their money. And that's an understatement," Reid said in a statement.

The company, 80 percent owned by the government and the recipient of $170 billion in bailout funds, paid $165 million in bonuses Friday. In retribution, Obama pledged legal action. Sen. Christopher Dodd, D-Conn., proposed a tax "specifically targeted" to AIG bonus recipients Monday evening, CQ Politics reported.

By Tuesday, Rep. Carolyn Maloney, D-N.Y., said she would draft legislation to tax the bonuses at 100 percent, while Rep. Gary Peters, D-Mich., drafted a bill that would recoup 60 percent on bonuses above and beyond the 35 percent tax rate the recipients were likely to pay.

In another tact, U.S. House of Representatives Financial Services Committee Chairman Barney Frank, D-Mass., said the government should simply assert its right as majority shareholder to take such measures as replacing AIG executives.

Republicans took turns blaming the administration for the fiasco, Politico reported.

"The president's spokesman said that they were confident that they knew how every dime was being spent at AIG," House Republican leader John Boehner, of Ohio, said. "Well clearly, they didn't know what they were talking about."

"It seems like an administration in disarray," added House Republican whip Eric Cantor, of Virginia.

The firm said the bonus payments were contractual obligations but the explanation did nothing to cool the furor. AIG Chief Executive Officer Edward Liddy is scheduled to appear before a House subcommittee Wednesday.