Obama Implies Rejection of House Bonus Tax Plan

Monday, March 23, 2009

Yesterday I asked the question, what happens if President Obama refuses to sign the House-sponsored bill that slaps a punitive 90 percent tax on bonuses to executives at financial institutions like AIG who received taxpayer bailout money?

Last night on CBS’ 60 Minutes, the president appeared willing to wager significant political capital and suggested he would not sign the bill because the tax would is unconstitutional and he would not “govern out of anger.”

While questioning the constitutionality of the House measure, Obama said he expected the Senate would produce a more acceptable version of the bill — one he could sign.

There is considerable political risk attached to Obama’s implied rejection of the 90 percent tax measure. The bill overwhelmingly passed the House last week as lawmakers responded to a tidal wave of anger over bonus payments to American International Group executives.

A week ago, AIG admitted they paid out $214 million in bonuses even though taxpayers were keeping the insurance giant afloat with a $170 billion government bailout.

This entry was posted in Bailout, News, Politics, President Barack Obama, U.S. Economy and tagged , , , , , . Bookmark the permalink.

13 Responses to Obama Implies Rejection of House Bonus Tax Plan

  1. Joe in Colorado says:

    Obama is a compelling speaker and he enjoys a high level of support at this early stage of his presidency, but if he refuses to sign the bonus tax bill, he’s not a good enough speaker to convince the American people that he sided with Wall Street over Main Street.

  2. Sean says:

    I’m angry about the bonuses, but if heavily taxing the bonus-thieves is unconstitutional, I don’t want to see the bill pass. The constitution has been violated enough in the last 8 years. I’m angry that AIG was trusted with spending the money appropriately given their past failures and what brought them to needing the help in the first place, but I think we have to suck it up, realize we screwed the pooch on this and be a hell of a lot more careful in the future. I would love it if we could find a legal constitutional way to get the money back or do something to to send a message that the bonuses were inappropriate, but unless we can send that message legally and constitutionally, I think the best thing we can do is air our grievances and give AIG the worst PR we can.

  3. feminazi says:

    I understand constitutional concerns and how a bill like the one passed by the House could end up before the US Supreme Court. But I also understand the rage sweeping across this nation as Americans lose their jobs, their homes and their retirement. What I hear from friends, family members and my neighbors is, someone needs to pay and they’ve decided this time, it’s AIG and Wall Street.

  4. Jon says:

    I realize they take my conservative card for saying this, but this? This is why I have a lot of respect for the Pres.

    We need more people in politics with the courage to do what they think is right even when it will cost them.

    The only way we are ever going to get them is to support them even when what they see as doing what is right does not mean doing what we want.

  5. Estacada says:

    Say what you will about President Obama but this entire mess is former President George W. Bush’s fault.

    The TARP language was written by Henry Paulson and Ben Bernanke. The previous Congress approved and Bush signed it. You aren’t going to tell me that Bush’s legal team didn’t go through the TARP bill with a fine tooth comb. They knew good and well the absence of transparency meant bailout recipients like AIG were free to pay out bonuses that weren’t earned, at the expense of the American taxpayers.

    Why do you think the Congress was told if they didn’t vote for it, the U.S. economic system would collapse? Bush knew he had 90 days remaining on the clock to reward his Wall Street supporters.

  6. Stephan Iversonn says:

    I’ll save everyone the time and effort.

    If the president refuses to sign the House bill taxing the bonuses at 90%, he should expect political hell not only from the Congress but more importantly, from an already angry and weary public. Obama’s honeymoon could turn out to be the shortest in modern, political history.

  7. bradfrmphnx says:

    I don’t want them to get their bonuses, but I don’t see how we can stop them from it. If its unconstitutional we shouldn’t pass it, no matter the angst. We can not start that kind of thing here in America ever. Talk about opening a Pandora’s Box.

    I see the Senate cleaning it up enough for Obama, who taught Constitutional Law, to sign it.

  8. VicoDANIEL says:

    The Feds can step in and amend the TARP provisions to read, bonuses paid to executives earning more than $250,000 will automatically disqualify AIG and others from accessing future government bailout funds.

    This isn’t rocket science.

    The Feds change contracts all the time. If AIG, or BofA, or Merrill, want to take it to the High Court, I say bring it on. A court challenge will result in a public relations nightmare for corporate America.

    vicodaniel1987@yahoo.com

  9. retahyajyajav says:

    What if Frank Rich, who wondered, has a “Katrina moment” arrived for President Obama, is correct?

    50 days into his first term, and already there is a defining moment that threatens to undermine the goodwill the American people have for the president?

  10. libhomo says:

    Obama’s position shows why we need public financing of campaigns. If the banksters couldn’t write big campaign checks, Obama would have no reason to spout this nonsense.

  11. Fran says:

    So all Congress needs to do is take the words “effing Bastards at AIG” out of the verbiage, substitute “the nice people at AIG” & Obama will sign it?

  12. MacDaddy says:

    Like others, I’m outraged at AIG. However, passing a bill that probably is unconstitutional is not the way to go. I think the government should find another way to get the money back, including the promise that no more bailout money will be forthcoming until all the money is returned and all the AIG employees in the division that caused this mess in the first place are gone. Many are gone already, but there are still some there.

    In the future, money should only be given to institutions in increments, and only then after they have reached specific goals that we set along the way.

  13. Brigadoon says:

    If AIG is smart, the executives will return 100% of the bonus money. It’s dirty money and tainted with the patina of greed. This is worse than blood money because it comes at a time when many states have unemployment rates above 10%. I mean, how stupid can AIG be?

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