Tonight during his interview on CBS’s 60 Minutes President Barack Obama continued to back away from the House passed AIG bonus bill. Obama said that the tax code shouldn’t be used to punish people, but the AIG situation was egregious.
Here is the video:
Steve Kroft asked Obama if he thought the House bill was constitutional. Obama answered, “Well, I think that as a general proposition, you don’t wanna be passing laws that are just targeting a handful of individuals. You wanna pass laws that have some broad applicability. And as a general proposition, I think you certainly don’t wanna use the tax code to punish people. I think that you’ve got an pretty egregious situation here that people are understandably upset about. And so let’s see if there are ways of doing this that are both legal, that are constitutional, that upholds our basic principles of fairness, but don’t hamper us from getting the banking system back on track.”
That was a nice dodge by Obama who never really answered the question. His non answer confirms the reports that have been coming out since this bill passed that the White House isn’t happy with the House bill. The Obama administration has been urging restraint and trying to put pressure on AIG to give the money back. Earlier on Sunday, administration officials were appearing on the talk shows and delivering the message that they thought the House bill would have to be modified.
The politics of this situation are very basic. Obama wants to get the bonus money back, but he doesn’t want to be seen as the president that signed the biggest single tax increase ever into law. In passing the bill, the House lived up to its reputation for knee jerk reactions. My guess is that the option that the administration would prefer to pursue, would involve suing AIG from the government’s position as the primary shareholder in the company.
Senate Republicans are doing Obama a favor by slowing up progress of the bill. It is a pretty safe bet that the bill that passes the Senate will not be the same as the one that passed the House. I don’t think Obama wants to sign the bill as is, but with public outrage being so strong, and the president himself expressing so much public anger over the bonuses, I don’t think he has much of a choice.