Treasury Secretary Tim Geithner last night in letters to both chambers of Congress says he plans to recoup the $165 million in bonuses from the $30 billion in TARP funds the Treasury pledged to AIG two weeks ago – bringing the U.S. government’s total investment in AIG to more than $170 billion. Still, Congress is moving full steam ahead to pass legislation before the end of the week to tax the bonuses out of the AIG employees along the lines of principles put out yesterday evening by Senate Finance Committee Chairman Max Baucus and the panel’s top Republican Chuck Grassley (apparently even though he originally opposed a tax solution, House Ways & Means Chairman Charlie Rangel is now on board, a leadership aide tells me). And today in testimony before the House Financial Services Committee AIG CEO Edward Liddy said he’s asked the executives to give the bonuses back. Maybe tax payers will end up making a profit if we get them back three times.
Meanwhile, Rep. Connie Mack, a Florida Republican, today became the first member of Congress to call for Geithner’s ouster. And Grassley today also asked the Treasury Inspector General to investigate Geithner’s handling of AIG bonus-gate. Some of those unique qualifications might come in handy now.