AIG, the Constitution, and Bonuses

The House has passed a measure imposing a special punitive tax of 90% on certain employee compensation in response to the AIG scandal. As others have noted, this raises serious constitutional issues. Article I, Section 9, Clause 3 says simply and directly: “No Bill of Attainder or ex post facto Law shall be passed.” The congressional bill being considered in response to the AIG bonuses seems to violate both those prohibitions at least in spirit...

Bills of attainder, ex post facto laws, and laws impairing the obligation of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation.
James Madison

Aside from the dangers to liberty from overzealous members of Congress, there are issues of priorities here. While Congress has been busy with this particular
inquisition, the Federal Reserve is moving ahead with a new plan to shower the economy with a massive $1.2 trillion cash infusion–an amount 7,200 times greater than the $165 million of AIG retention bonuses.

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My thoughts: The national debt just passed $11 trillion, Congress is considering another stimulus package, and the Fed just created $1.2 trillion. There are more important things for Congress to be angry about. Maybe if Congress took the month off, filled out NCAA tournament brackets and watched basketball things would improve. The bonuses were filling a contractual obligation. If Congress had wanted to attach strings to the bailout money, it should have been done before the bailout occurred.