Outrage! AIG to Give Huge Bonuses After $170 Billion Bailout
Republicans and Democrats alike expressed "outrage" with the news that insurance giant AIG had decided to pay out $165 million in bonuses despite receiving $170 billion in taxpayer bailout funds. But while administration officials shared such populist indignation, they insisted that on this front their hands were tied.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous," said Larry Summers, chairman of the White House National Economic Council, appearing on ABC's This Week.
But Summers painted the Obama administration as largely powerless to stop the cash rewards. "We are a country of law. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system."
The dominant thread of the Sunday talk show circuit was, indeed, AIG. On Saturday, the insurance company, dependent on taxpayer largesse, let it be known that it would be issuing contractually stipulated bonuses to company executives for bringing in a certain amount of business. Treasury Secretary Timothy Geithner informed the firm about White House displeasure with the move and demanded that the bonuses be renegotiated. The next day, a whole host of lawmakers followed suit.