PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: The outrage over AIG`s bonuses continues, with more lawmakers calling for a crackdown on Wall Street`s excesses. Congressman Paul Kanjorski will grill the head of AIG at a hearing tomorrow. Tonight, he gives us a preview. SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: The luck of the Irish was with the markets today. Stocks post solid gains on this Saint Patrick`s Day. But some on Wall Street think the upswing is just a bear trap.

KANGAS: Apple dialed up big gains in today`s rally-- that as the tech giant unveils the first major upgrade to its iPhone operating system.

GHARIB: Bernie Madoff`s victims are getting some help tonight from the IRS. The tax man says losses from investment theft will be almost fully deductible.

KANGAS: I`m Paul Kangas.

GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Tuesday, March 17.

Good evening, everyone. The firestorm over those huge bonuses at AIG heated up today. Washington lawmakers are now threatening to slap new taxes on those bonuses in an effort to recover some of the money. And New York Attorney General Andrew Cuomo sent a letter to Congress providing details of who got the money at the struggling insurance giant and how much. According to Cuomo, 73 employees were paid more than a million dollars each. AIG`s Chairman and CEO Edward Liddy will have to answer questions about those controversial bonuses tomorrow when he appears before a House Financial Services Subcommittee. The chairman of that committee is Congressman Paul Kanjorski, a Democrat from Pennsylvania. Darren Gersh sat down with Kanjorski and asked him what he wants to hear from Liddy tomorrow.

REP. PAUL KANJORSKI, CHAIRMAN, CAPITAL MARKETS SUBCOMMITTEE: Well, I want to hear the fact that Mr. Liddy understands how this decision to handle this information on the bonuses and the compensation and withholding it from the administration and from the Congress until the 11th hour was extremely detrimental and I would be less disappointed if I didn`t know but I actually related that conversation and that information to him more than six weeks ago. So he should have been and was informed as to how serious it would be. That being the case, he`s again caused a destruction of the building of confidence that`s so necessary if we`re going to save this system.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Well, when you talked to him, did he just not get it? What did you tell him? And what was his response?

KANJORSKI: Well, first of all it was a response we`re going to work with you, congressman. It means we`re going to give you the information you need so we can analyze what the possibility of what we`re going to have to do or what we`re going to do will be known. That`s important. Even if he`d done the very same thing -- if he gave me the information and he convinced me beyond an iota that there`s no other choice that they had and we`d run through every legal mind that we were aware of and there`s nothing else they could have done, we would have been on board with him to explain that to the American people and to our fellow members.

GERSH: I was told by a company source that AIG did go to many of these employees and said, look, we want you to give back some of this bonus. We want you to give back 30 percent if the company is in trouble. You need to make a concession and the employees said no, we have legal contracts. In this environment, we don`t trust that if we renegotiate, if we`re staying with the company we`re going to get paid six months down the road or nine months down the road. Others said I want what I want now so do you think AIG tried?

KANJORSKI: They may have, but they weren`t sufficient in trying. They should have extracted some help from the president, from the Congress and the American people. Right now, you know, I`m in favor that we find out who these folks are that got these bonuses. Let`s name them, because even if they`re not going to give the money back, in Pennsylvania, we have a principle known as shunning. We`ll shun `em! They took four, five, as high as $6 million at a time when this country is on the verge of bankruptcy and they would serve their own purpose ahead of the public purpose.

GERSH: What can Congress do now? Can Congress stop this, stop these bonuses from being paid?

KANJORSKI: Well, he, Mr. Liddy had guaranteed to us that they would give us the information necessary to make these judgments. We did not receive any of that information until this last Saturday night, the very day the payments were made, so it`s after the fact. The burden now of proof has shifted and that makes it a very difficult time to change the burden of proof legally. But it just seems to me that they were taking personally defensive action. They were dealing in such a way that their employees would be protected and have the greatest advantage than the American people or the American government and it`s just not the way I like to see it happen. If nothing else, I`d rather say to Mr. Liddy, look, Mr. Liddy, nothing against you, but I don`t like the way you make judgments that don`t come out in a situation that I determine as being fair and equitable. That being the case, let`s try new leadership.

GERSH: Are you going to say that tomorrow?

KANJORSKI: I may very easily say that. I`m considering it.

GERSH: Let me ask you about the larger picture, which is this obviously is a blow to AIG and it`s got a lot of people upset about the way these financial rescues are working. Has it poisoned the well for the Treasury to come back to Congress and say sorry, we need more money to save the banking system?

KANJORSKI: Right now, they couldn`t succeed. That`s the judgment of most members of Congress. Now if that`s the case and that case prevails, you`re talking about a scenario that you could cause the American economic system and the world economic system to collapse. AIG is so important and so intertwined that its survival is essential. That`s why I can`t believe that on crummy bonuses that they put the whole American and world economic system at risk.

GHARIB: And Darren joins me now to talk more about AIG and tomorrow`s hearing. Darren, very interesting interview and I was particularly intrigued that the congressman was saying that he may ask for Ed Liddy, the CEO of AIG, to step down. Does Congress have the power to do something like that?

GERSH: Yeah, it was interesting. Um, Congress as Barney Frank, chairman of the House Financial Services Committee said today, look, the American government owns about 80 percent of the voting rights of AIG. So they could act like an owner and they could replace the CEO if the government wanted to. After all, it was Hank Paulson, the former Treasury secretary who gave Liddy the job, but I have to say, so far, Kanjorski is the only one who is saying he`s thinking about changing the leadership at AIG. It`ll be interesting to see tomorrow how the hearing goes and whether more people start calling for a change.

GHARIB: Darren, a few weeks ago, I interviewed Ed Liddy and I asked him about how he felt about being in this job because, you`re right, he had just gone into retirement and Hank Paulson talked him into taking this job and he said he did it as a service to the country and you probably know he`s getting paid $1 a year, so he might be relieved to resign, right?

GERSH: I don`t know, maybe they can cut that to $0.50. But, you know, one question about ownership is -- and I think a very real question here would be, who would take the job? And that`s a challenge that the government has inherited by being such a large owner of AIG and having such a stake in so many of these financial institutions. If you force people out and you do it in a very public way, it makes it harder to attract new talent.