In an article headlined House Passes Tax on Wall Street Bonuses, the Washington Post reports that by a vote of 328 to 93, the US House of Representatives approved legislation that “…would impose a 90 percent income tax on $165 million in bonuses distributed to employees of the troubled insurance giant American International Group.”
Have any of the 328 Representatives who voted for this read the United States Constitution?
The United States Constitution, Article 1, Section 9, Clause 3 says, “No bill of attainder or ex post facto law shall be passed.”
A bill of attainder is a special legislative act prescribing punishment, without trial, for a specific person or group.
If this bill proceeds to the US Senate, is passed there, and is ultimately signed into law by the President, then every Representative who voted for it, every Senator who votes for it, and the President who signed it will have committed a high crime or misdemeanor sufficient to justify their removal from their respective office.
As a practical matter, the administration of such removals would by itself likely create a true Constitutional crisis.
The US House of Representatives today acted recklessly and unconstitutionally. Let us hope calmer heads prevail in the US Senate.
Anyone in charge there?
Comment by Dan — March 19, 2009 @ 4:46 pm
I just added a link to the post to let people see how their Representatives voted.
Comment by Bill — March 19, 2009 @ 5:02 pm
Good. Both Minnick and Simpson voted NO. At least they won’t be tried for high crimes and misdemeanors.
Comment by Dan — March 19, 2009 @ 5:54 pm
The members of Congress are behaving dangerously and recklessly like a panic-driven mob. To answer, your first question Dan, no. There is no leadership there at all.
Comment by Bill — March 19, 2009 @ 6:59 pm
The whole notion of leadership is alien to a generation of Americans. They see Obama making speeches and sounding important, but that is not leadership, nor does it show courage. Even on the GOP side, I see no leadership, only posturing and lots of harrumphing.
Comment by Dan — March 19, 2009 @ 9:39 pm
not happy about paying bonuses to people who run a company into the ground, but this knee-jerk reaction is not the way to stop it. if the senate doesn’t stop this foolishness, the president should.
Comment by reagan — March 20, 2009 @ 8:53 am
Bill,if this passes, could those affected challenge it in court? I would think yes given the constitutional position. I think it should be remarked that the Democrats did away with a clause in the stimulus bill that would have prevented this fiasco. In fact, removing this clause was specifically done so these AIG bonuses could be distributed. It is quite clear that the well deserved public backlash has caused Obama and his party to spin like a top on steroids, in an effort to distance themselves from a situation they, in effect, created.
And whatever happened to the concept that a bonus was a reward for company profits? AIG posted the largest business losses in history…so why bonuses? That mortally stupid “contract” excuse is absurd. That contract ws between AIG executives and employees…not the American tax payer. Therefore, it does not apply.
Comment by Faringdon — March 20, 2009 @ 10:08 am
Faringdon: The bonuses are part of the pay package. Way back when, someone (Clinton, I believe) wanted to punish “excessive compensation.” So the Federal Government capped how much an employer could pay high-end employees by levying a huge tax on earnings. Now, mostly, there are very smart people who get paid a lot of money each year. They figured out how to get around the War on Success and transferred what was once base salary in to a bonus structure.
In other words, this is yet another problem the government itself created. By punishing people who demand high wages, the government created the bonus structure we see now. Those people at AIG and elsewhere aren’t getting a bonus for exceptional work, they were promised such bonuses as a base compensation for their employment. Had the government not changed the rules, there would be no bonuses at all for those clowns.
Then again, there is a question of whether people who run a company into the ground are really worth anything as far as compensation is concerned. Taking it right back to the government, had Uncle Fed not bailed out AIG, then the damn company would have gone bankrupt (as it should have) and those people would be out of work today (as they should be).
Comment by Dan — March 20, 2009 @ 10:26 am
Thanks Dan…hence the term “retention bonus”. I cannot help but be struck by the irony of Bill Clinton wanting to punish excessive compensation. Do you know what that…uhhh..person receives for a speaking engagement?? Definitely “excessive compensation”. As for AIG..what is the big deal if they were bankrupt? They claimed it would be catastrophic for the world economy, hence the bailout. Talk about self importance! Many good people who have worked dilligently are now out of work through no fault of their own. And the corrupt AIG carries on.
Where is the justice there…rhetorical question.
Comment by Faringdon — March 20, 2009 @ 11:21 am
Faringdon,
If I were one of the employees whose compensation would be subjected to the tax or if I were being intimidated to return some or all of a lawfully earned and delivered bonus, I would be talking with my attorney.
If the compensation contracts that included the bonuses were illegal contracts, then they should be unwound in court invoking due process of law, not a bill of attainder prohibited by the Constitution.
I believe some of the bonuses may have been excessive, but contractual excesses do not justify hasty legislation that violates the Constitution. Lawful remedies are available to correct any unlawful actions.
Comment by Bill — March 20, 2009 @ 11:40 am
Bill, I wasn’t defending or agreeing with the legislation, far from it. That was my question, if the legislation were to be passed, would it hold up in court. As for the contracts, the only way that would be “unwound” in court would be for “the people” to bring a class action against AIG based on the taxpayer not being obligated by this business contract. I don’t really know, would such a case be under the auspices of the justice dept. on behalf of the people. The legislation is unconstitutional, so how can it be passed. Oops…we’re talking about politicians here.
Comment by Faringdon — March 20, 2009 @ 3:36 pm
Faringdon,
Nor was I suggesting you were agreeing with it. I believe there are Constitutional issues, the bill of attainder being one. I think there is also a separation of powers issue. The legislature is not empowered to act as judge and jury to decide cases involving the laws it passes. That is reserved for the judicial branch (US Constitution, Article 3, Section 1). Whether it would ever get into federal court would probably depend on whether any of the victims, the recipients whose bonuses were taken via taxes levied only on them as a class, chose to pursue it. The Solicitor General of the US would defend the US in the US Supreme Court.
Comment by Bill — March 20, 2009 @ 3:52 pm
See http://www.bloomberg.com/apps/news?pid=20601087&sid=aC_hgTeumc70&refer=worldwide
Comment by Pariah — March 20, 2009 @ 5:42 pm
Pariah,
It should scare the dickens out of people to know that the federal courts would be disinclined to intervene on behalf of people (bonus recipients) who have been tried and convicted by 328 politically motivated jurors (legislators) without an opportunity to confront witnesses, dispute evidence, and present evidence on their own behalf in a court of law. The mob-mindset legislators’ action presumes that all the bonuses were undeserved and dishonestly obtained. Where is the equity for any of those employees whose bonuses were appropriate but taken from them without due process of law?
While the court has been reluctant to intercede on matters of taxation, the use of taxation as a penalty, a punishment, for belonging to a class or group of people (TARP recipient employees) seems beyond the scope of taxation for revenue purposes and becomes taxation for punitive purposes. Maybe we should impose unreasonable taxes on other readily identifiable classes or groups of people: People who drive 2007 model year Toyotas; people who own H&K weapons; African-Americans; residents of Kootenai County, Idaho. Due process? It goes out the window when you surrender the separation of powers and when you allow the Congress to be judge, juror, and executioner. The British learned that lesson.
Comment by Bill — March 20, 2009 @ 7:43 pm
Bill,
It is scary. It is also what happens when venial, corrupt poseurs take over a government. The so called ‘free press’ has crawled into bed with the thugs running our country. The last hope is the people, we the people. Government has failed, the press has failed, now we need to act. Good people need to be recruited to run for office. The hypocrisy and misdeeds of the criminals need to be exposed and the people need to be engaged.
Comment by Pariah — March 20, 2009 @ 8:18 pm
Good people need to be recruited to run for office.
but that never happens. if you find any let us know.
Comment by reagan — March 20, 2009 @ 10:51 pm
reagan,
I can name a few that fit the bill right here on this site! 🙂
Comment by concerned citizen — March 21, 2009 @ 7:55 am
Bill the Senate appears to be balking on this. Perhaps an aide pointed out the Constitution to them. However, even if this passed the Senate, would it not be null and void based on the unconstitutionality? Or would it have to go to court. Admittedly, federal law is not my strong point. But how can they pass a law that contravenes the Constitution?
Comment by Faringdon — March 21, 2009 @ 10:24 am
Faringdon,
Those are really great questions. There is a presumption of constitutionality of laws deliberated, voted on, and passed by the Congress. The presumption is that the Congress will have considered the constitutionality of the legislation and will not pass legislation it believes or knows to be unconstitutional. The presumption of constitutionality is highly debated and very debatable. Even if both the House and the Senate pass a law they believe to be constitutional, the separation of powers gives the President the authority to veto that same law for any reason, including his belief it is unconstitutional. Then Congress is required to override the President’s veto before the law is enacted. The courts, ultimately the US Supreme Court, may determine a law’s constitutionality. So, if the House and Senate pass the law and the President signs it into law, then someone (such as one or more bonus recipients whose bonus was taxed) would have to challenge the constitutionality in court.
Comment by Bill — March 21, 2009 @ 11:28 am
Thanks Bill…and a tip of the hat to our founding fathers for checks and balances. The presumption question is truly interesting, most particularly given the quality and/or lack thereof, of our politicians. The president and congress are on the hot seat given their need to spin this fiasco. Had not Sen. Dodd facilitated this situation….. AS for the recipients challenging this law in court, as is their right, given public indignation that could be tricky. Oh what a tangled web…..
Comment by Faringdon — March 21, 2009 @ 12:03 pm
I loved the recent Ramirez cartoon of Dodd as the captian in Casablanca. Check it out and scroll down on the link to see the quick related clip from the movie, it’s very funny:
http://hotair.com/archives/2009/03/20/ramirez-the-captain-louis-renault-award/
Comment by mary — March 21, 2009 @ 12:46 pm