House passes tax bill on AIG bonuses

The US House passed a bill this afternoon to tax back those AIG bonuses, even with questions about its legality.

"We want our money back and we want our money back now for the taxpayers," House Speaker Nancy Pelosi said before the vote, according to the Associated Press.

Republicans called it a legally questionable ploy to paper over mistakes by the Obama administration in allowing the bonuses in the first place.

Representative John Boehner, the top House Republican, said the bill was "a political circus."

UPDATE: In a statement issued this evening, President Obama endorsed some version of the bill, though he declared that the bonuses are a "symptom of a larger problem."

“Today's vote rightly reflects the outrage that so many feel over the lavish bonuses that AIG provided its employees at the expense of the taxpayers who have kept this failed company afloat. Now this legislation moves to the Senate, and I look forward to receiving a final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated," said the statement from the White House.

"In the end, this is a symptom of a larger problem – a bubble and bust economy that valued reckless speculation over responsibility and hard work. That is what we must ultimately repair to build a lasting and widespread prosperity.”

House Republicans found themselves in a tough spot on the vote, but enough of them voted yes for the bill to sail through.

They, too, want to respond to the public anger over the $165 million in bonuses, which went to the very same traders in London who nearly drove the insurance giant into bankruptcy. But philosophically, they also oppose higher taxes, particularly on higher-income taxpayers they say create most jobs.

Boehner said he would oppose it, but told his rank and file to vote their conscience.

Earlier today, Representative Eric Cantor of Virginia, in charge of rounding up Republican votes, was rather wishy-washy. Asked whether his party had finally found a tax it could support, Cantor said on MSNBC that the bill would get bipartisan support, but he also promoted a "sense of Congress" resolution and added to Republican criticism of Treasury Secretary Timothy Geithner.

"I want to get the bonus payments back in," Cantor said, but he refused to say -- despite repeated questions -- whether he plans to vote for the bill.

The Democratic bill would levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000 at companies that have received at least $5 billion in government bailout money.

Because it is being expedited, the bill required two-thirds approval for passage.

The bill passed on a 328-93 vote. In the end, 243 Democrats and 85 Republicans supported the bill, while six Democrats and 87 Republicans opposed it.