While Ms. Schmidt may be lauded for voting against the wasteful stimulus bill that included the AIG Bonus protections, yesterday she got caught up in the irrationality of the moment and was one of 328 voting [t]o impose an additional tax on bonuses received from certain TARP recipients.
The constitutionality of the proposed law is being debated, but we already know that the 'Law of Unintended Consequences' has a way of rearing its head when Congress acts in haste (emphasis added):
Statement of Judiciary Ranking Member Lamar Smith Full Committee Mark-up of the “End GREED Act”
Ranking Member Smith: Mr. Chairman, the American people are rightly outraged by the $165 million in bonuses recently given to AIG executives. Using taxpayer dollars intended to save struggling companies to pay instead for bonuses is hard to believe.
It’s a shocking, but real-life example of what happens when we rush legislation through Congress without much debate. And it’s why we should not be considering this bill today.
In responding to the economic crisis, Congress has let emotion overrun reason. There has been little accountability or transparency in this process, despite continued promises from the Administration.
When it comes to today’s proposal, Congress has let expediency override common-sense. We have had no debate, no hearing, no witnesses, and no real evaluation of this bill.
Congress already has learned the hard way about the unintended consequences of rushing to legislate without adequate expert testimony and debate. But that’s exactly what we’re doing now.
The Majority told us about this proposal yesterday. I asked for a hearing so we could analyze the proposal and ensure that it doesn’t result in unintended consequences.
We should hear from experts, weigh their opinions and come up with a constitutional and considered solution to the AIG bonuses blunder. It will do no good if we pass a law that is flawed.
The Supreme Court, for example, instructed us long ago, in U.S. v. Security Industrial Bank, that the Bankruptcy Clause is subject to the Fifth Amendment’s takings clause.
Any expectation that we can use the Bankruptcy Clause in this bill to get around the Takings Clause is unfounded. AIG executives may be able to recover through takings claims the money this bill tries to take back.
Where will that get us? Once again, the taxpayer will be left holding the bag.
Further, this bill is open to the question of whether the Bankruptcy Clause can be used in the unprecedented way this bill proposes. That is why we have hearings and subcommittee markups, which are glaringly missing here.
Any solution must ensure accountability, transparency and fiscal responsibility to guard against waste, fraud and abuse.
We have had less than 24 hours to review and consider this bill, which raises constitutional issues. It is wrong to rush to judgment on this issue without at least holding a hearing.
The legislation that started this problem was rushed through Congress in this same manner. In fact, the language that allowed AIG executives to receive these bonuses was added by a Democratic Senator at the last minute to the $787 billion stimulus bill.
Why is this legislation being rushed through the Judiciary Committee? Is it on orders from the Speaker? What happened to transparency and the public’s interest to know the facts?
I’m sorry we are considering this bill today, but I understand the need to address the issue.