The US House of Representatives just passed a bill that empowers the Treasury Department the power to ban “unreasonable and excessive” payouts to employees of companies receiving bailout money.
Entitled “The Pay for Performance Act of 2009″ the bill was passed by a 247-171 vote. The bill, if eventually signed into law, gives power to the Treasury Secretary to lay down a salary cap and ban unjustified bonuses.
Again, the Democrats played a huge part in the bill with only 8 representatives from the party voting against joining most of the Republicans (10 of whom decided to vote across party lines).
The new bill joins another bill that proposes to tax individuals receiving any bonuses from companies being bailed out by the government. Any employee of a company receiving at least $5 billion in bailout money who earns $250,000 would be taxed at a 90 percent rate.
These new laws are all reactions to AIG bonus controversy where employees of the beleaguered insurance giant received millions in bonuses despite the company being bailed out by the government.
Source: CNN
