Republicans, who would not be caught dead voting to raise even slightly the taxes of billionaires, rushed Thursday to put their names on a roll call to tax away the ill-gotten bonuses of the AIG executives who helped undermine the world financial system. Among them was Arkansas’ own Rep. John Boozman, who ordinarily takes pains never to vote for legislation initiated by Democrats. But this was panic time.
Only six Democrats voted against the tax measure, which was put together in the middle of the night and rushed to a vote in response to the mighty roar from people who were angered by the payment of $165 million of “retention bonuses” to AIG executives after the government pumped $180 billion into the insurance giant to prevent its collapse.
One of the six, to the surprise of many, was Vic Snyder, our own contrarian congressman. It should have been no surprise. For nearly two decades, in the Arkansas legislature and Congress, Snyder made his mark by voting the other way when a swell of popular emotion dictated that politicians fall into line. Every member of the House must have envisioned the political ads attacking him for defending the bonuses if he dared vote against the bill. But Snyder invests more faith in the people that they will recognize political theater and appreciate reason.
The bill would impose a tax rate of 90 percent on bonuses paid to executives of companies that received at least $5 billion of federal assistance under the troubled asset program. Its purpose was to deflect rising criticism of Congress, the administration and the Federal Reserve for not stopping the bonuses before now.
Is there such a person as an un-demagogue? If so, he is Vic Snyder. Here is the statement Snyder made when reporters pressed him to explain his vote:
“During times of universal anger, political fear, and economic uncertainty, our nation deserves a legislative process that results in meaningful and effective solutions to the very complex and serious challenges facing the American people. It was late last night before the text of this bill was available, there was very limited discussion today, and no time at all for the kind of analysis, both in and out of Congress, necessary to avoid unintended consequences harmful to our long-term goals of reinvigorating our economy and restoring the American dream. I am confident that ultimately we will achieve these long-term goals.”
A legislative body should be reflective and analytical before voting? Who does that anymore? Congress has done enough hasty lawmaking and we regretted it in our leisure. Remember the mammoth USA Patriot Act, crafted in secret and sprung on the country without the lawmakers or anyone else reading it. Snyder would cast one of the few votes against making it permanent.
If the Federal Reserve, the Treasury Department and the relentless tide of public opinion cannot force the repayment of the bonuses, then Congress should seek some remedy, a responsible and clearly legal one. Some argue that a retaliatory tax would amount to a bill of attainder, which is prohibited by the Constitution, or at least the unlawful abrogation of a contract. AIG had contracted with the executives to pay the bonuses. It is not clear that a narrowly targeted tax to discourage or thwart an unwholesome activity is a bill of attainder, but we have no doubt that the currently constituted federal courts would find it so.
Now that the House members have protected their flanks by passing the bonus bill, they can buckle down and figure out how to fix the problem without disturbing the Constitution or deepening the turmoil in the financial system. We have a faith that Snyder will have less to fear from angry voters than the rest.
