Lawmakers are vowing action following a massive public outcry around bonuses at the bailed-out insurance giant AIG. On Tuesday, Senate leaders said they would introduce a measure imposing a special surtax to recoup taxpayer money. House Financial Services Committee Chair Barney Frank said Congress should remember that the US government now owns 80 percent of AIG.

Rep. Barney Frank: “But I think we can look at it from the standpoint of us as the owner. We’re the owner of that company, in fact. Now, there are some covenants that have kept us from doing that. I think the time has come to exercise our ownership rights — we own most of the company — and then say, as owner, 'No, I'm not paying you the bonus. You didn’t perform. You didn’t live up to this contract.’ Presumably, the bonuses had some merit stuff in it.”

The Treasury Department, meanwhile, said it would deduct the $165 million in AIG bonuses from the government’s next infusion of $30 billion in bailout funds.