An official tells CBS News that the administration continues to negotiate with the insurance giant to bring any payments "in line with our priorities."
"It is unacceptable for Wall Street firms receiving government assistance to hand out million dollar bonuses, while hard-working Americans bear the burden of this economic crisis. That is why Secretary Geithner has made it clear to AIG that their bonus structure for senior executives is inappropriate," the official said.
The official said the bonuses have "long been known about inside and outside AIG" but that the administration didn't want to accept them.
The White House now is seeking what are described as "mechanisms" to recover money spent on bonuses, the official said.
The White House is clearly concerned that public reaction the bonuses could affect the president's overall economic goals, reports Maer. But the company insists some of the bonuses are part of legally binding contracts signed before the government's AIG bailout.
Meanwhile, on NBC's "Today" show this morning, Democratic Rep. Barney Frank, chairman of the House Financial Services Committee, said the bonuses amounted to "rewarding incompetence."
"These people may have a right to their bonuses. They don't have a right to their jobs forever," Frank said. "Maybe it's time to fire some people."
Yesterday, White House National Economic Director Lawrence Summers called the bonuses "outrageous" on CBS' Face The Nation. Click here for more from the interview with Bob Schieffer.
Update 9:55 a.m. ET: A White House official confirms to CBS News that President Obama will speak out on the AIG bonuses during his event later this morning with small business owners. He is expected to voice anger over bonuses paid to the company that has received billions of federal bailout dollars. He could also elaborate on administration efforts to recoup some of the bonus money.