Industry Letter To Senators On Bonus Tax

March 23, 2009 Re: "Excessive" Compensation Tax Dear Senator: This is profoundly not about AIG. This is about the economy. The economy had begun to show signs of a recovery until last week's hysteria. The economic recovery will begin, or not, with financial institutions. Because an economic recovery must be financed, or it simply cannot happen. The TARP is working. The 10 companies in the House-passed bill (approximately 350 in the Senate version) have increased their lending and investment in the economy since receiving TARP capital. They are also paying a 5% dividend to the government for that capital. The tax bills will undermine the recovery effort. For example, those 10 companies provided approximately $680 billion in loan commitments and renewals in the 4th quarter of 2008. If the tax bills force them out of TARP, or forces them to curtail lending through the loss of experienced employees, the total lending will be reduced. And the economic recovery that could have begun will be further delayed. Of course other companies may eventually step in to fill the void, but the largest companies provide the leading share of financing the economy. And "eventually" is a long time to wait for Americans who are unemployed and depending on the recovery to start soon. This is also about fairness. It is about the tens of thousands of mid level employees and their families who are truly innocent victims of this hysteria. They worked at their jobs all through 2008, often at reduced compensation, longer hours, and more stress. They served their customers, their communities, their colleagues, and their country with distinction and honor. At the end of the year some of them received much reduced bonuses from their employers per their contracts. They do not deserve this public humiliation. As a matter of fairness, they deserve their 2008 pay.

Additionally, the events of last week could have a chilling effect on participation in the toxic asset purchase plan, released this morning. And this is also about the Constitution and due process of law. Our government is founded on the rule of law, not a rule of mass hysteria seeking to confiscate private property. The founding fathers declared that the US Senate should be like the "saucer to cool the tea." It's time for calm and reasoned leadership to "cool the tea" and do what is right for the American people, for the economic recovery, and for fairness. Any of the CEO's in the Roundtable or I would be happy to discuss this subject with you at any time. Respectfully, Steve Bartlett President and CEO