Washington  - Spurred on by public ire over bonuses paid at firms that received government bail-outs, the US Congress Thursday was considering a 90-per-cent tax on executive bonus payments by companies receiving more than 5 billion dollars in federal funds.

The action, which the House of Representatives could vote on later Thursday, comes amidst furor over actions by American International Group (AIG), the world's largest insurance firm whose near failure in September 2008 helped push a teetering US financial system into rapid descent.

With an estimated 180 billion government dollars keeping AIG afloat, AIG last week paid 165 million dollars in retention bonuses to 4,600 traders in the financial products unit whose investments and insurance coverage of subprime mortgage securities are at the heart of the problem.

"Most Americans believe a bonus is something paid for a job well done," said Democratic Representative Charles Rangel. "The whole idea that they would be rewarded millions of dollars is repugnant ... to any sense of decency."

Rangel, chair of the Ways and Means Committee, said the "red light" was flashing on the practice.

House Republicans say the bill is a sham, and are demanding the all of the bonus money be paid back.

House Republican Leader John Boehner called the proposal a "bad bill with bad consequences" and laid blame for the situation on Democrats, who allowed a last-minute clause in stimulus legislation that grandfathered contracts signed for bonuses and executive pay up to mid-February, when the law was passed.

The 90 percent tax would apply to people earning more than 250,000 dollars, including bonuses, and would stop when the US government's investment in the company falls below 5 billion dollars. Foreign employees would not be affected, according to Bloomberg financial news service.

The US Senate is working on a separate version of the measure to impose a 70 per cent tax on the bonuses that would also include foreign workers. No date has been set for Senate action. (dpa)