Washington, D.C. -- Speaker Nancy Pelosi spoke on the House floor this afternoon in strong support of H.R. 1586, which will impose a new 90 percent tax on bonuses received by executives who worked at companies, such as American International Group (AIG), that received more than $5 billion in taxpayer assistance. The House approved the measure this afternoon by a vote of 328 to 93. Below are the Speaker's remarks:
“Mr. Speaker, today we are gathered on the floor to address a symptom -- the bonuses -- a symptom of a challenge that we face in our economy and in our financial situation in our country.
“I believe the President is on the right path and did an excellent job in his leadership when we passed the recovery act here. This Congress is moving forward with regulatory reform to address the lack of regulation supervision and discipline in the financial markets that brought us to this place. The President's initiatives on housing will help people stay in their homes - addressing the housing crisis is essential to addressing the financial crisis in our country. And then we have to deal with the stability of our financial institutions.
“And in the course of doing that, with a massive infusion of cash from the Fed on September 16th, long before some in this body were even elected to the Congress, the Federal Reserve transferred these funds and the many funds since then without any requirements or conditions.
“We have come to a point where it is very clear that there are many in our country who believe that the way a free market system works for them, and not in a national interest, is to nationalize the risk and privatize the gain. They are entrepreneurial, they take risks, enjoy the benefits when success is there. But when it is not, these undue risks have to be paid for by the taxpayer, or so they think.
“It's just not right.
“We all believe in a free market system. We all see that capitalism produces jobs and creates capital and that is important -- it creates wealth, and that is important to the success of our economy -- creating jobs especially.
“But it isn't right, it just simply isn't right. When there is a reward, a spelled out in advance reward for those who will take undue risk -- when they fail, they get a bonus, the taxpayer gets the bill. This must end.
“And today with this resolution, I think that were are making two important statements. One is that the Administration should continue in its efforts to recoup, recover the money and prevent these bonuses from going forward. And the other is that we want our money back and we want our money back now for the taxpayers.
“This isn't that complicated. There are other issues, other steps that we can take. And working in a bipartisan way on the committees of jurisdiction -- the Financial Services committee for one -- we will have other pieces of legislation which will ensure that this can never happen again. We're working with the Judiciary Committee to say when is the national interest so offended that it is okay then to revisit a contract.
“You hear all this talk about ‘oh, we can't revisit contracts, it's the Constitution.' We respect that, and we would not do so, unless we would do so very carefully. But no one seems to have a problem saying to autoworkers in Michigan that their contracts be revisited. That they have to take a deep cut in order to sustain an industry because that industry is important to our national security -- we must have a manufacturing base and we cannot have it be undermined. So if the workers' contracts are so subject to review and revision, why is it that when somebody gives a contract for a bonus to somebody for failure, which is known not to be in the national interest, that you can't even bring up the subject?
“Because of the failure of AIG and the downturn for so many other financial institutions in our country, our people do not have job security -- they're afraid of losing their jobs, their homes, their pensions, the college education of their children. It's just not right. There is a direct connection between this nationalizing the risk and privatizing the gain and the economic security of America's families and the strength of Main Street.
“So let's take a step and say we want our money back -- here's one way to get it. And then let's work together to do more in that regard to bring justice to the system, but more importantly to work together to bring stability -- stability to our economy.”