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“I think the president would be concerned that this bill may have some problems in going too far — the House bill may go too far in terms of some — some legal issues, constitutional validity, using the tax code to surgically punish a small group,” said Vice President Joe Biden's economic adviser Jared Bernstein said on ABC's “This Week.” “That may be a dangerous way to go.”

Rep. Barney Frank, the Massachusetts Democrat who heads the powerful banking committee, supported the legislation but said it may not be enough. He suggested that Washington should consider more steps, including suing AIG to recoup the money. The government has an 80 percent equity stake in the financial giant, a position Frank said should be used “to assert our rights.”