This is the VOA Special English Economics Report.
was the common reaction of Americans this week to bonuses paid at rescued financial
companies. Lawmakers held hearings and President Barack Obama denounced the
extra pay at American International Group. The huge insurance company nearly
collapsed last September.
Since then, it has received more than one hundred
seventy billion dollars in government aid. Taxpayers now own about eighty
percent of the company. Billions loaned to A.I.G. have gone to pay debts owed
to Goldman Sachs and other American and foreign banks.
But the anger was directed mainly at one
hundred sixty-five million dollars in bonuses paid to employees of A.I.G.
Financial Products. That division caused many of the company's problems.
bonuses were retention payments -- a way to keep good employees. Yet some who got
them at A.I.G. have already left.
Wednesday, A.I.G.'s new chief, Edward Liddy, told Congress that he has asked
employees to return at least half of bonuses of one hundred thousand dollars or
more. Some, he said, have already done so.
critics agreed that A.I.G. had to honor contracts. But Thursday, the House of
Representatives voted to place a ninety percent tax on those bonuses at A.I.G.
and at other companies getting large bailouts. Yet such a measure could violate
the Constitution's guarantee of equal protection under the law.
Earlier in the week, the president directed
Treasury Secretary Tim Geithner to look for ways to block the bonuses. But there
were questions about why new restrictions on companies had excluded contracts
dated before February eleventh, including those at A.I.G.
polls show that more than half of Americans oppose more aid for the financial
industry. Some observers said it was easy for politicians to attack big
bonuses. Much harder, of course, is changing a system that let companies take the
risks that led to the current financial crisis.
Federal Reserve this week announced a new trillion-dollar plan to fight the
recession. The aim is to help lower interest rates on housing and other loans and improve
central bank said it would buy up to an additional seven hundred fifty billion
dollars in mortgage-related securities. The Fed will also buy up to three
hundred billion dollars of long-term Treasury bonds. The Fed has not tried to
influence long-term rates this way since the nineteen sixties.
that's the VOA Special English Economics Report, written by Mario Ritter. Transcripts, MP3s and podcasts of our programs are at voaspecialenglish.com.