WASHINGTON (CNN) – President Obama's economic advisers on Sunday refused to endorse a House bill that would levy a 90 percent tax on bonuses paid out by companies that receive bailout money, with one administration official describing the plan as potentially "dangerous."
Fueled by anger over more than $165 million in bonuses paid out by insurance giant AIG, the House passed the punitive tax bill on Thursday in a 328 to 93 vote
Jared Bernstein, Vice President Joe Biden's top economic adviser, told ABC's "This Week" that the bill "may go too far in terms of some legal issues, constitutional validity, using the tax code to surgically punish a small group. That may be a dangerous way to go."
Bernstein noted that that private investors the government needs to carry out its toxic assets plan might be scared away by such a tax.
Christina Romer, who chairs the White House Council of Economic Advisers, told CNN's "State of the Union" that the president believes "it's completely appropriate to have different standards" for firms that have taken federal funds.
But she told CNN's John King the White House favors creating a federal "resolution authority" over bailed out financial institutions, which would give a judge the ability to void the kind of controversial contracts that allowed AIG to pay out the bonuses.
Romer called it "a legal way to break these contracts and go forward."
Another White House official stressed that the president will weigh all options coming out of Congress, but will not act too hastily to recoup the money.
"The president has been pretty forthright in his anger with what happened with AIG, and the simplest thing is for these guys to give the money back," Austan Goolsbee, a member of the Council of Economic Advisers, told CBS' "Face the Nation."
He added, "The president has also been clear, we don't want to govern out of anger."