Who was responsible for eliminating a provision in the stimulus bill that would have restricted bonuses to beneficiaries of TARP money? On Tuesday night, ABC News reported that "during late night, closed door talks" last month, conference negotiators stripped out an amendment drafted by Sen. Olympia Snowe, R-Maine, and Sen. Ron Wyden, D-Ore., that aimed to retroactively restrict bonuses over $100,000 at any company receiving federal bailout funds."
The provision was stripped out during the closed-door conference negotiations involving House and Senate leaders and the White House. A measure by Sen. Chris Dodd, D-Conn., to limit executive compensation replaced it. But Dodd's measure explicitly exempted bonuses agreed to prior to the passage of the stimulus bill.
FireDogLake's Jane Hamsher and Salon's Glenn Greenwald contend that the bonus exemption should not be blamed on Chris Dodd; that it was, instead, inserted as a result of pressure from Larry Summers and Tim Geithner. As such, the handling of the bonus scandal has become just the latest data point fueling already deep misgivings among left-wing critics of the Obama administration's economic policymaking.
Judging by the questions asked at the congressional hearing on AIG early Wednesday afternoon, the political heat on this specific point is going to rise. Ed Royce, R-Calif., quoted the ABC News story and asked the representative from the Government Accountability Office exactly why the Snowe-Wyden amendment had been removed from the stimulus bill.
The GAO representative, Orice Williams, had no answer. I don't know why anyone would expect the GAO to know what had happened during closed-door House-Senate negotiations on the stimulus, but I don't think Royce was actually expecting an answer. He was trying to score some political points.
Which provides us with yet another reason why the bonus scandal is doing such an effective job of distracting the Obama administration from dealing with more fundamental economic problems. When right-wing Republicans and left-wing Democrats can unite, you've got a big problem.
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