WASHINGTON (AP) — Vice President Joe Biden's economic adviser warned Sunday that a congressional plan to tax American International Group Inc. executives' bonuses may go too far in using the tax code as a tool for retribution.
President Barack Obama has not said whether he would veto some version of a House-backed plan to heavily tax the $165 million in bonuses. Biden economist Jared Bernstein said it's important to look at what version of the proposal comes out of the Senate.
"I think 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 — some legal issues, constitutional validity, using the tax code to surgically punish a small group," Bernstein said in a television interview. "That may be a dangerous way to go."
Democratic and Republican leaders in the Senate also have expressed concern about the plan's approach to dealing with the AIG bonuses.
American International Group received billions in taxpayer dollars to keep its doors open but still paid employees the bonuses their contracts required. Populist anger led the House to impose a 90 percent tax on bonuses paid this year to companies that needed government bailout money.
Obama and his top advisers called the bonuses outrageous and condemned them. Bernstein said the administration must be focused on the big picture, not just one company.
"What happened at AIG, vis-a-vis these bonuses, is a symptom of a much larger problem," he said. "And we cannot lose sight of the larger problem, which is stabilizing financial markets,"
Bernstein appeared on ABC's "This Week."
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