From a statement just released by Senate Majority Leader Harry Reid (D-Nev.):
First, we are sending AIG a letter asking them to renegotiate the contracts that include these appalling bonuses. Second, if they don’t, Chairman [Max] Baucus [D-Mont.] will propose legislation to give this money back to the taxpayers by subjecting the bonuses to severe tax penalties. Third, as part of the Economic Recovery Act, we asked the Treasury Department to establish guidelines regarding executive pay and luxuries. Last week we sent Treasury a letter urging it to quickly finish these guidelines; today we reiterate that request. Fourth, we will work with President Obama and the Banking Committee to complete a Wall Street Accountability bill as soon as possible.
Meanwhile, of course, legislation to stabilize the troubled housing market — which has already lost $6 trillion since the downturn began, according to some estimates — remains stalled in the Senate. Why AIG’s $165 million in bonuses is more important than that $6 trillion has yet to be explained.