This is a rush transcript from "On the Record ," March 31, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Do you want the government to control how much money you make? Well, depending on where you work, that could happen soon, maybe. How? Joining us live is Byron York, chief political correspondent for The Washington Examiner. So what's this bill in Congress?

BYRON YORK, WASHINGTON EXAMINER: You remember a couple of weeks ago, they passed a retroactive 90 percent tax on AIG bonuses. You know, support for that almost went away almost immediately. The Senate Democrats moved away from it. The White House did.

But now they've passed a bill that actually is more extensive than that. It would ban, in companies that have taken any TARP money, including -- and also Fannie Mae and Freddie Mac -- it would ban, quote, "unreasonable and excessive compensation" not just for the top executives, for everybody in the company.

VAN SUSTEREN: So not bonuses, but your salary. I mean...

YORK: Bonuses, too.

VAN SUSTEREN: No, no. I understand bonuses, but it goes beyond bonuses and...

YORK: Bonuses and salaries.

VAN SUSTEREN: Theoretically, it comes all the way down to your salary, so it could be a bank teller at a bank that -- in theory.

YORK: It could be.

VAN SUSTEREN: A bank teller at a bank. They could say, you know, $35,000 is too much, you should make $34,000.

YORK: That's right. And of course, the huge question is, well, then, who decides what is unreasonable and what is excessive, and also what is not based on performance because you -- it says that no one can get a bonus that's not directly based on performance-based measures set forth in standards established by the secretary of the Treasury. The Secretary of the Treasury gets to decide what is reasonable, what is not excessive, and what is based on performance for all of these employees that the government has any capital investment in.

VAN SUSTEREN: All right, so let me get this straight. The House passed that 90 percent tax on the AIG bonuses, $165 million, which has never gone to the Senate. I mean, it's just sort of gone...

YORK: It went away.

VAN SUSTEREN: It went away. So that was a big show-and-tell when they acted tough. But that one's gone away. I didn't think it was constitutional anyway. Now they've got this new bill, which is far more extensive, which could reach everybody. And when's that one getting voted on?

YORK: It goes for a vote in the full House tomorrow, and it's probably going to pass.

VAN SUSTEREN: Who's behind this?

YORK: Well, it's sponsored by a man named Alan Grayson, a freshman Democrat from Florida. He has a bunch of co-sponsors. But you know, I think as far as Chairman Frank is concerned, he controls the committee. So this is a group basically behind him. The other thing is, you know, with the AIG tax, half of the Republicans in the House voted for it, including Eric Cantor. This time I'm told you're going to see a lot fewer Republicans, but it's still going to pass.

VAN SUSTEREN: Why did -- let's go back to AIG on that tax. I mean, they were all so grandstanding, that this is horrible, this is rotten. Why aren't they pushing it and tell the Senate to take it up and vote on it, if they think it was so important? I don't think it's constitutional, but that was just -- that was just a...

YORK: It was just a storm of rage, of populist rage, and it passed...

VAN SUSTEREN: You know, no, it makes -- but it makes me feel -- as a voter, it makes me feel had.

YORK: Yes.

VAN SUSTEREN: You know, if they acted like this was so important, We're getting tough on these horrible bonuses, and then as soon as people stop talking about it, they basically say to the Senate, Never mind. Just let this one go away.

YORK: What happened, that bill, that AIG tax, passed on a Thursday. By the Sunday morning talk shows, the president's top advisers were saying might have some constitutional problems. Shortly thereafter, Harry Reid said, We're not going to take it up. So I think the House saw that they were out there all by themselves, and they just decided to back off on it.

VAN SUSTEREN: But they should -- but the House is made up mostly of lawyers. They should have known that before they even voted or even wrote it or voted for it. I mean, are all the people in the House just...

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YORK: Well, the Founders foresaw that the House, to your terms, would act more on popular passions, and they created a Senate deliberately to slow things down. And that's actually exactly how it worked in this case.

VAN SUSTEREN: Listen, if this is more extensive, who's slowing -- I mean, is the White House in any way supporting this one?

YORK: Well, that's going to be the question. You know, when it does pass, probably tomorrow, we're going to have to see, Is the Senate going to take this one up? Is the president going to distance himself from it? It's coming at a time -- you know, there's the greater budget debate going on. The president's in Europe. So it may be a few days before we find out what the administration's position really is.

VAN SUSTEREN: But I find it hard to believe that the House thinks this one is going to be popular. I mean, at least the AIG million-dollar - - $165 million bonuses, that was -- whether it's unconstitutional, it's still popular, OK? This one, which is far more extensive and doesn't just get the big people, the top people, but could theoretically reach down and control even someone who's making, you know, $30,000, $40,000 a year -- this is going to be enormously unpopular with people.

YORK: Yes, and it's retroactive. I mean...

VAN SUSTEREN: Which makes it worse!

(LAUGHTER)

VAN SUSTEREN: It's probably not constitutional. I mean, for that reason, it's probably not constitutional.

YORK: Yes. It's retroactive. And people are worried about the degree of power that it places in the hands of the Treasury secretary. I mean, just last week Timothy Geithner was on Capitol Hill asking for all sorts of new regulatory powers for the federal government, and now they ask for this. So it's gotten people worried about too much power concentrated in one person.

VAN SUSTEREN: That doesn't worry me so much as that they think that this would even be a good idea. Like, you know, what would possess them? I mean, like, very basically, I mean, even getting to that point. But anyway, Byron, thank you.

YORK: Good to be here.





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