Obama Doesn’t Support Bill to Tax AIG Bonuses

  In the rush to gain political points the House passed a bill to tax the bonuses the executives from AIG received at 90%. They feigned outrage over the fact that these bonuses were handed out even though it was Chris Dodd, under direction from the Obama administration, who made these bonuses possible with an amendment to the stimulus bill. Maybe next time they will read a bill before they pass it.

  This notion of taxing ANYBODY or ANYTHING at 90% is outrageous. Chuck Shumer going on television and warning the executives that they better give the money back because the government wasn’t going to let them keep it was outrageous.

  Now even President Obama might feel that this idea is outrageous. When first told that the house passed this bill of attainment he stated “I look forward to receiving a final product that will serve as a strong signal to the executives who run these firms that such compensation will not be tolerated.” But he seems to be backing away from that statement now.

The president would be concerned that this bill may have some problems in going too far – the House bill – may go too far in terms of some legal issues, constitutional validity, using the tax code to surgically punish a small group of people,” Jared Bernstein, Vice President Joe Biden’s chief economic adviser, told George Stephanopoulos, host of on ABC News’ “This Week.”

    That is what my concern is with this bill. I don’t like the fact that these executives were given bonuses with my money. I also believe that once a company takes federal money the government should have some control over them, at least until the money is paid back– then it’s hands off. But AIGwas given this money with no restrictions, as stupid as that was, and now the government is trying to cover up its own mistake by punishing the people who AIG was contractually obligated to pay. These executives did nothing wrong by taking the money. The government erred by making it possible for these people to get the money. Passing a bill to punish a small group of people with retro-active taxes is setting a dangerous precedent, it looks especially nefarious when you take into account that the billions of dollars in bonuses that Merrill Lynch paid out just two weeks before the end of last year will not be subject to the scrutiny of the new 90% tax bill. This is a targeted killing.

  Once the precedent is set the application of it will expand in the future. We are beginning to see it already with regards to executive pay as the president is now talking about limiting executive pay on all companies. Whether they received bailout money or not. The fact that the president thinks he can have any say in how much a person earns is more that a little scary.

  Somebody in the administration sees the bill of attainder proposed by the House as constitutionally suspect and now the president is backing down from his original stance, but the door is still open.

 “That may be a dangerous way to go. That said, let’s see what comes out of the Senate. He has not said he won’t sign this bill. Let’s see what comes out of the Senate. Let’s see what gets to his desk.”

  While it is good news that the president has backed away from the confiscatory tax act of 2009, we see that there is still being work done to get something to his desk. With 15 of the 20 AIG executives already bullied into giving back the bonuses it is my belief that the administration is keeping plans in the works to punish the AIG executives to apply pressure on the rest of the AIG executives to return the money thereby avoiding the constitutional battle that may have ensued.

  The sooner this embarrassment is forgotten the better for the administration, the best that Obama can hope for is that the AIG executives to appear to willingly give back their bonuses even while Washington is putting pressure on them to do so. Then the episode can be put in the past and the president won’t have to worry about whether what the congress tried to do is constitutional.

  Perhaps the most frightening part of this whole debacle was when the president said “and so they were making a legal calculation, and their legal judgment was not necessarily wrong. But there’s a moral and an ethical aspect to this, as well.”

  He was implying that while what AIG did was legal, it doesn’t matter because he feels it was unethical and immoral. To think that we have a president who is willing to bypass the law to impose his morals and ethics on the rest of us is disturbing. When the law of the land takes a backseat to what a leader says is moral and ethical, and more important, when the law of the land is secondary to the will and whims of the leader, you do not have the law of the land other than what the leader says you have.

  There is a name for that.

  The president may have backed down on this issue, but only because he sees an end in sight that does not require his signature on a bill that was sure to have it’s constitutionallity challenged in the courts.