The Consequences of the Congressional Response to AIG's bonus fiasco

Situation:
In the last few weeks our country has expressed increasing anger over the disbursement of over 160 million dollars in bonuses to employees of ailing insurance giant AIG. Today, the House of Representatives passed HR 1586, which taxes the bonuses of employees of institutions receiving more than $5 billion in TARP funds at a rate of 90%. This resolution only applies to employees who make more than $250,000 annually, and will be effective retroactively from January 1, 2009. All of this sounds great to the angry American populous who frown on such frivolous spending of taxpayer dollars, but have the legislators overstepped their Constitutional boundaries in order to appease the people? This taxation may be interpreted as a bill of attainder, which is a legislative act that singles out an individual or group for punishment without trial. Our Constitution prohibits such actions in order to maintain the balance of power between the legislative and judicial branches of government.

Why it matters:
I think most people agree that the AIG bonuses are undeserved and should be repaid. Americans are outraged and are therefore pressuring legislators to act quickly to resolve the situation. In demanding immediate reconciliation, we may be encouraging rash action rather than reasoned responsiveness to the situation. We cannot, as Americans, allow populist rage to override Constitutional legality. Although the taxation of the AIG bonuses justly reappropriates the taxpayer dollars, the consequences of such actions may set precedents that could undermine the integrity of the Department of Justice in the future.

I do not believe that Americans should be any less passionate in expressing their disgust over the AIG bonuses, but perhaps we could refocus our efforts. It is the duty of the Justice Department to handle contract disputes and punish parties in violation of said contracts. Why not take a legal avenue to recover the money, as suggested in Lawrence Cunningham's op-ed in yesterday's NY Times? It is encouraging to see that so many Americans are becoming more and more actively involved in the politics that influence our nation. However, we must be sure that we are responsible in our involvement, not only voicing our concerns, but also allowing our elected officials time to adequately devise the most effective and ethical plan of action.

And that is why it matters.

/theGHenius