By Zack Stovall
Arkansas News Bureau
LITTLE ROCK — Decrying “irresponsibility” within AIG management, U.S. Sen. Blanche Lincoln, D-Ark., on Tuesday advocated a dramatic tax increase to recoup much of the $165 million in bonuses doled out to executives of the company that received $170 billion in federal bailout funds.
“I’m frustrated. I think the American people and Arkansans especially are frustrated, too,” Lincoln said in a phone interview with the Arkansas News Bureau.
“I’ve spoken with business owners in Arkansas who have the same practical and common-sense approach as many Arkansans, and that is that you get bonuses on a good year, and you don’t get bonuses on a bad year,” she said. “This has not been a good year (for AIG).”
In September, AIG’s stock plummeted over 95 percent at the market’s open, which was quickly followed by an emergency bailout of $85 billion. Earlier this month, AIG reported a fourth quarter loss of nearly $62 billion, the largest quarterly loss in corporate history. The federal government has kept the company afloat with tax-funded bailouts for fear the insurance giant’s fall would bring the rest of the national economy down with it.
Lincoln said such irresponsibility by AIG in paying the bonuses is unacceptable, and on the Senate floor Tuesday she joined a call for action, possibly including a stiff income tax increase on millions of dollars in bonuses paid to 73 AIG executives.
“It’s an effort to try and recoup some of that taxpayer money that was invested and given to them to keep their company afloat,” the senator said. “We’re just trying to recoup the investors’ dollars.
“We’re also trying to set an example to other companies who have these bailout funds. These are emergency dollars, this is not a sweepstakes.”
Lincoln said AIG’s actions damage the confidence and trust that are “critical components” to setting the national economy straight.
Lincoln said she lobbied, along with then-Sen. Joe Biden and eight other senators, for more transparency and oversight in the appropriations of the first bailout in the last few months of the Bush administration.
“Unfortunately, we were told the sky is falling by (former Treasury) Secretary (Henry) Paulson and that it had to be passed immediately, with those details left out,” Lincoln said.
She said she also introduced a similar amendment in the American Recovery and Reinvestment Act of 2009, but it was taken out by the U.S. House before President Obama signed the economic stimulus package into law.
Lincoln currently sits on the Senate Finance Committee.
