CNN: House OKs bill taxing bailed-out firms' bonuses.- Page 2

[Roscoe]

Posted: 3/20/09 at 3:39pm

"The ones that are getting attention in the press are. However, the way the bill is written, the impact will be very broad. It could impact mid-level managers, engineers, underwriters, systems folks, etc."

Oh, well. Them's the breaks. You work at a company that takes billions of money in bailouts from taxpayers, you lose your bonus. Makes sense to me, I think. Would they rather lose their jobs entirely?

And I've always wondered why they didn't just bloody well defer the bonuses.

[madbrian]

Posted: 3/20/09 at 3:50pm

"Oh, well. Them's the breaks. You work at a company that takes billions of money in bailouts from taxpayers, you lose your bonus. Makes sense to me, I think. Would they rather lose their jobs entirely?"

As a taxpayer/owner of these companies, it makes zero sense to me. Now that we've sunk billions into them, I want them to succeed. Putting aside folks like the credit swap managers who played a role in sinking the companies, I do want the retain the truly valuable ones that will help the companies rebuild and succeed. As I see the bill, it is unfair to an awful lot of people, and it may drive good employees out of these companies. That's not in out best interest.

[YouWantitWhen????]

Posted: 3/20/09 at 3:57pm

Sounds like you want to punish the entire class...

I agree with MB - I might be OK if the limit on comp was increased, and it focused on individual compensation rather than a household.

If you have two mid level professionals working in a major city for a company that received TARP funds, they will probably be impacted. It will encourage those folks to leave and try to find other jobs in companies that did not receive bailout funds, which will undermine the company's recovery.

If you want to focus on individual compensation, and put it at $500,000 per person including bonus, I might not have such a strong reaction. But the $250k on a household (only one of whom may work for a TARP receiving company) is too low a threshold.

[Roscoe]

Posted: 3/20/09 at 4:04pm

Yeah, but when a company is at the very brink of bankruptcy, when it has to be bailed out in order to ensure its very existence, surely some concessions have to be made. Why should those whose policies and actions have brought the company down to the point of being untenable not have to pick up some of the slack?

How terribly unpatriotic of them to expect the US Taxpayer to foot the bill for bonuses for people who screw up their jobs.

Updated On: 3/20/09 at 04:04 PM

[YouWantitWhen????]

Posted: 3/20/09 at 4:36pm

And what about the folks who did not screw up their jobs, and are vital to turnaround the company. The IT resources, accountants, and others who had no role in the underlying problem, but are vital to keep the company going?

Two IT resources working for a company that keeps it online website going will most likely make more than $250k aggregate. You are punishing the innocent for the sins of senior management.

[Roscoe]

Posted: 3/20/09 at 4:49pm

Welcome to life on earth. The innocent suffer with the guilty. It happens. Especially in corporate America.

Since when does any major company have a problem with making the innocent suffer with the guilty. Since when does any major company not first lay off the receptionists, IT resources, accountants and others who had no role in the underlying problem while preserving the senior management sinners who brought the company low?

Updated On: 3/20/09 at 04:49 PM

[YouWantitWhen????]

Posted: 3/20/09 at 5:01pm

Wow.

So, these folks should get it coming and going, from both their company's and the government.

Great.

I have a baby that got thrown out with some bathwater if anyone wants one.

[javero]

Posted: 3/20/09 at 6:04pm

While it pains me to admit it, this is a stroke of political genius on the part of Nancy Pelosi. She forced the bulk of the House GOP leadership to support the biggest personal tax hike in US history.

Cantor et al got some 'spaining to do to their consituents come 2010. Pelosi singlehandedly exposed what most of us have known for years. That is that the so-called GOP leadership in Congress has no principles to speak of. This move completely neutralizes the argument that the Dems from the previous Congress acquiesed to Bush on Iraq war funding.

Man, there is no one in Congress more tribal than Nancy Pelosi. And she and Cantor got beef.

No fiscal conservative would ever stand for a 90% tax rate on any class of personal income. It's just that matter-of-fact for a so-called fiscal conservative. Lawrence ODonnell completely neutered Eric Cantor before the vote was taken. Cantor would never say that he was going to vote against the bill.




House GOP members give in to the rage (and Pelosi)

Updated On: 3/20/09 at 06:04 PM

[madbrian]

Posted: 3/20/09 at 8:54pm

Well, I just wrote to both my senators sharing my opinions of this bill.

[madbrian]

Posted: 3/20/09 at 9:25pm

Looks like the Merrill bonuses, which at > $3 BILLION are roughly 15-20 times that of AIG, will be exempt from the bill as written because they were paid in December.

http://www.nytimes.com/2009/03/21/business/21merrill.html?hp

[kelzama]

Posted: 3/20/09 at 9:29pm

Whereas true fiscal conservatives suffer no delusions that the current republican congress is anything but, the vote was split down the middle of the party, 85Y to 87N.

democrats, however, may have a harder time justifying the vote; all but 6 voting yea.

Congress legislating judgment and punishment at one fell swoop? The forefathers are rolling in their graves. Even more so since the evidence that the issue was discussed at length on the floor of congress prior to the bill passage and fund distribution only proves the whole matter to be serious backpedaling.
How your representative voted

[javero]

Posted: 3/21/09 at 12:43pm

"...the vote was split down the middle of the party, 85Y to 87N."

Another way of wording it is that over half the House GOP membership got played by Pelosi. Cantor had been bad-mouthing Pelosi for a minute but she showed him.

The House bill is completely comical.

[Yawper]

Posted: 3/21/09 at 1:15pm

"The ones that are getting attention in the press are. However, the way the bill is written, the impact will be very broad. It could impact mid-level managers, engineers, underwriters, systems folks, etc."

Um, no. Even with bonuses those positions don't earn over $250K a year outside of Wall Street, if even there (and engineers almost never get bonuses anyway).

[YouWantitWhen????]

Posted: 3/21/09 at 1:55pm

It is on household. So, yes it could. If your combined household income is above 250K, yes, it will apply.
Two managers in my company, with bonuses will earn over $250K in household income. Many IT professionals working in the major cities would as well. And, if one spouse is an attorney, and the other works as a mid-level manager at a company receiving funds, then his income will prevent her from receiving a bonus.

It is a stupidly crafted law.

In most major metropolitan cities, a household income of $250,000 makes you upper middle class, but not rich. If you are talking single employee compensation, it would make more sense.

[Yawper]

Posted: 3/21/09 at 2:07pm

No. In 2006, less than 2% of households nationwide had household incomes over $250,000 per year.

No sympathy here for any of them.

[YouWantitWhen????]

Posted: 3/21/09 at 2:20pm

Great. I guess you don't factor the college loans, and effort any of them made to perhaps create that income.

You are going to the path of class warfare, and uniformly punishing people prohibitively for success without consideration to whether they are, or are not, responsible for the situation at hand is simplistic.

If I was married, and work for a company that took TARP funds (neither is applicable), I would probably be looking for a new job. These companies will lose talent and it will lessen their ability to recover.

Look, I would be OK if the figure was based not on household, but on individual compensation, or if there was a percentage limits on any bonuses.

But get your pitchfork all pretty and shiny, and lets go get the "Monster."

[Yawper]

Posted: 3/21/09 at 2:29pm

There is never *not* class warfare when the wealth gap is as large as it is now. Only now it's the upper end whining and resorting to that argument.

[Gothampc]

Posted: 3/21/09 at 2:31pm

We've talked a lot about executive compensation, but I want to bring up another point.

In the stimulus bill that was so hastily signed without being read, it states that these shovel ready jobs will be paid at union wages. So what we have here is taxpayers (who may not be making union wages themselves) paying union wages. You may have to pay someone $40 per hour to hold a sign that says "Men at Work." Where is the logic in that?

[Yawper]

Posted: 3/21/09 at 2:39pm

You need to do more research to educate yourself about union wages in the trades.

[YouWantitWhen????]

Posted: 3/21/09 at 2:40pm

I agree that the wealth gap is far too large. And there is a problem. And, I agree that taxes on top earners should be more than on the middle class.

But I think this goes too far.

I personally am not effected by this, but I think it is bad policy for a variety of reasons. Bonus are out of control, especially for upper/senior management. But you are going after those who don't make decisions - who do the high-end grunt work. And, there is a lot of high-end grunt work in corporate America. I think this is a short-sighted solution that will not do anything other than satisfy the blood lust of trying to blame someone for the situation we are in and possibly compromise the ability of these companies to retain mid-level talent.

I guess that is tantamount to whining in your mind.

But, I will make sure when I date to ask if he works for a TARP receiving company - because lord knows, I don't want my bonus impacted because of the work my future husband may do.

[Gothampc]

Posted: 3/21/09 at 2:49pm

"Bonus are out of control, especially for upper/senior management."

But who are you to determine that? Do you know how much profit they bring into a company and how many jobs are inter-related to their jobs.

I also notice that this is being targeted only at business people. You don't hear a word about Hollywood stars and their gross salaries. And they do less work than these business people.

[Mr Roxy]

Posted: 3/21/09 at 2:56pm

It is easier to go after them Goth . The shredding has just begun.

Is it any wonder when the class warfare & hate crowd stir things up many of those getting bonuses have gotten death threats.

It is amazing that Geitner claims not to have know of this when it was written into the bill before that. Dodd is doing damage control.If this is a guy who did not pay his taxes & who can't even get people to work for him & he is going to save us. God help us. I was channel surfing last night & they are already taking odds as to when Obama is going to dump him. With this & Iran basically telling O to buzz off he is off to a real good start.

It is going to be a bumpy ride boys & girls.

Updated On: 3/21/09 at 02:56 PM

[YouWantitWhen????]

Posted: 3/21/09 at 3:04pm

Goth, the bonus structure of many (not all) organizations that deal with selling stuff is premised upon a variety of factors. In many organizations, they are different calculations depending upon job function. For example, any bonus I receive is premised up my performance, company performance, return on investment and the like. I do not sell products, but provide support and services.

Others companies where sales are key have bonuses calculated solely on their ability to hit a certain number. There is an inherent conflict of interest there in my opinion. It can lead to cutting corners in order to make the sale, regardless of whether that sale is in the long-term best interest of the company. That structure in my opinion is out of control. And, to your point, many of them do not bring profit into the company if the items is missold, or sold in a manner that can create liability - so the sales figure alone should not be used as a metric for any bonus. It should be one of many factors.

Retention bonuses in the amounts rewarded by AIG and Merril similarly are problematic, because they really are not being used as a bonus, but a bribe. There is a little bit of financial extortion going on here, with those that drove the companies into the ditch not being willing to give directions out without getting a bucket of money.

And, we are only talking about entities that have received government bailouts because the underlying issue is whether the US taxpayer should be paying bonuses. If these companies were profitable, and had not invested so poorly and sold products that were no better than a house of cards (credit default swaps) we would not having this conversation in the first place. So your last comment is nothing more than a red herring. Moreover, how do you now how much work people in hollywood do, and whether or not it is more than those at Merril or AIG? You don't. Updated On: 3/21/09 at 03:04 PM

[javero]

Posted: 3/21/09 at 6:59pm

What I don't understand is why the states don't rush in and revoke the charters of these zombie corporations. It's total bs that there are some corporations too large to be put down. The notion of perpetuity for fictitious persons has always disturbed me somewhat.

Corporate welfare is just as bad as that really awful bill which Rangel & Pelosi foisted upon the House membership with no compunction.

[Yawper]

Posted: 3/21/09 at 8:31pm

These are national charter banks, the states have no jurisdiction. The states did try to prevent these entities from growing as they did by challenging some reorganization tactics but the Supreme Court shot them down.



Watters v Wachovia Updated On: 3/21/09 at 08:31 PM