Rep. Lois Capps, D-Santa Barbara, on Thursday applauded the House passage of legislation that would recoup taxpayer dollars paid out to executives of companies receiving federal bailout assistance. Earlier this week it was reported that AIG recently paid its executives bonuses totaling $165 million as part of a larger total payout estimated at $450 million. To date AIG has benefited from more than $170 billion in taxpayer funds as part of government rescues of financial services companies. In response, the House passed the Bonus Recoupment Tax Bill (H.R. 1586), 328-93.

“I am glad we have taken swift action to correct this deplorable behavior by AIG and make this right with the American public,” Capps said in a statement. “This AIG situation is sickening and a sad testament to the lack of judgment that has far too long been part of business as usual. It also underscores the urgency and the need for overall financial regulatory reform so we don’t find ourselves in this position again. This is just the first step on the road to recovery, and I will continue to work with my colleagues in Congress and the Obama administration to fix our broken financial system.”

The bill will impose a new 90 percent income tax on bonuses received by employees of companies that have received more than $5 billion in taxpayer assistance. It would also apply to bonuses paid by Fannie Mae and Freddie Mac.

— Emily Kryder is communications director for Rep. Lois Capps, D-Santa Barbara.