Capps, Gallegly Both Vote to Punish AIG

In an exceptional display of bipartisan unity, the two congressmembers representing Santa Barbara County both agreed on the bill to punish insurance giant AIG by taxing the $165 million paid in bonuses last year by 90 percent. Typically, Lois Capps-a liberal Democrat – and Elton Gallegly – a conservative Republican – can be counted on to disagree on just about anything and everything. But on the AIG bonuses, the subject of much public outcry, the two found common ground. AIG, which issued insurance policies on bundled real estate loan portfolios, received $170 billion in federal bail-out funds to keep the financial giant afloat. When it was revealed that AIG spent millions on retention and incentive bonuses – all contractually entered into before the real estate market and stock market melt-down – elected officials have been outdoing one another to express their shock and outrage. Capps has been far more vehement in her denunciations of the deal, and voted happily for the punitive tax. Gallegly, usually adverse to any tax increase, reluctantly supported the bill in the end.