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In January, Congress authorized the President to go ahead with spending the second half of the TARP money that was authorized last October. I co-sponsored legislation to stop this from happening because up to that point, Congress had no idea how the first $350 billion was being spent. Congress didn’t know where the money was going or to whom it was going. On top of that, the second TARP bill had very little, if any, accountability measures to ensure that the money was going to be spent well.

When the stimulus bill was brought to the floor of the House for final passage, we were afforded less than 12 hours (From 11:30 PM – 9:00 AM) to read the 1179 pages of legislation before debate started. We now find out that a measure that passed the Senate to amend the stimulus to restrict large bonuses for companies receiving taxpayer funds was stripped out by Senator Chris Dodd during final, closed door negotiations. (These are the same negotiations that House Republicans were not included in). A new measure was then put in its place to exempt bonuses prior to February 11, 2009, paving the way for AIG retention bonuses to remain intact. You can read more about this at ABC News. 

And there’s more. We just heard from Freddie Mac – you remember, we bought Freddie Mac and Fannie Mae over the summer – that Freddie, a government sponsored enterprise, is about to pay the same kind of retention bonuses. It’s outrageous and insulting to all the hard working Americans who are forced to pay for this through their tax dollars.

So what have we learned from all the controversy surrounding AIG’s million dollar bonuses ($165 million total) that were paid for by taxpayers? First, Bailouts don’t work and we should not authorize anymore of them. That’s why the American people oppose massive bailouts. Bailouts have a history of encouraging corporations, instead of reforming the way they do business, to just come back next quarter and ask for more money. There are no rules or guidelines to follow. No structure to ensure the money is distributed in the right way. There’s no sunshine so the taxpayers can see where the money is going.

And second, this is a result of rushing to pass large spending measures without allowing the public enough time to read them first. It’s an irresponsible way to spend taxpayer funds and I find it interesting that so many in Congress that argued for quick passage of the stimulus are now “shocked” to find out about these bonuses. It’s just plain wrong to continue to operate this way.

Finally, this is an important lesson for all to learn because the President’s budget sets aside another $250 billion of taxpayer money for future bailouts. The President should rethink this and perhaps take that bailout money he set aside and designate it a bonus for hard working Americans in the form of direct tax cuts – that’s who deserves a break.