What Congress Can Do To Stop The AIG Bonuses

As recounted below, there's not so much that the executive branch can do -- and should do -- to prevent AIG from handing out loopy bonuses. But why can't Congress pass a law requiring that bonuses granted by a company that has taken bailout money from the Federal Reserve or TARP be taxed at a very high rate? Obviously, Congress would have to find some way to distinguish between legitimate performance pay and illegitimate bonuses, but a one-year tax hike on all such bonuses might not be unpalatable. It's a much saner alternative than to give the Treasury the instruction to root through contracts to find ways of breaking them.

This article available online at:

http://www.theatlantic.com/politics/archive/2009/03/what-congress-can-do-to-stop-the-aig-bonuses/1543/