Today's Outrage: Congressional Bonus Bullies

The hasty legislative response to the understandable outrage over AIG(AIG Quote) executives' $165 million in bonuses could do more harm than good.

The House of Representatives on Thursday passed a bill that would impose a 90% tax on all bonuses paid to executives making more than $250,000 at companies that have received more than $5 billion in government aid. The Senate is expected to debate a similar bill to the one the House passed.

The bipartisan support for the House legislation came as AIG has endured heavy fire from the public and Congress for paying the bonuses to executives in AIG's financial products unit, which had sold the derivatives that brought the giant insurer to the brink of collapse last fall.

It certainly is objectionable that 73 AIG employees -- 11 of whom no longer work at the company -- were paid bonuses of more than $1 million apiece by a company that has received more than $170 billion in federal bailout funds. While AIG has argued that it is contractually obligated to pay the bonuses, if the federal government had not saved the company in September, those employees would most likely be out of luck.

The response from lawmakers, however, goes too far.

Do you support hefty taxes on bonuses paid to some executives at companies who get government aid?
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Eight banks have received more than $5 billion in federal aid through the Troubled Assets Relief Program: Citigroup (C Quote), Bank of America (BAC Quote), JPMorgan Chase (JPM Quote), Wells Fargo (WFC Quote) Goldman Sachs (GS Quote), Morgan Stanley (MS Quote), PNC Financial Services (PNC Quote) and US Bancorp (USB Quote).