The problem for the Obama administration is that no one believes they can't stop the AIG bonuses. And, to be fair, that goes for those inside the administration, too. That they haven't figured out how to do it legally over the past two days isn't, they say, evidence that it can't, or won't, be done. "At this point, you have the President, the Treasury Secretary, the New York Attorney General, and the Congress trying to find a way to unwind these bonuses," said one official. "And they will." Options being batted around include everything from surgical taxation to radically tightened compensation limits next year. It's one of those moments when a political necessity becomes a policy necessity. "It's not that these bonuses will change the economic landscape, but that they're so outrageous that if we let this happen, the likelihood that we can go back and get more resources from Congress if we need them dims."
