- The Washington Times - Wednesday, March 18, 2009

UPDATED:

Republicans on Tuesday dispensed with their bipartisan spirit of outrage over huge cash bonuses for executives bailed out by federal money, pointing a finger of blame at Democrats in control of Congress and their party leader, President Obama.

Setting out talking points for his colleagues, House Minority Leader Rep. John A. Boehner, Ohio Republican, took aim at the White House, saying the president failed to demand the oversight that would have prevented the fiasco with insurance giant American International Group Inc.

“Two weeks ago, the president’s spokesman said that they were confident that they knew how every dime was being spent at AIG. Well, clearly, they didn’t know what they were talking about,” Mr. Boehner said.

Senate Republican leaders echoed the line of attack, hammering the Obama administration for not putting in place tougher restrictions on bonuses and other compensation payouts to AIG even as the Treasury Department was pumping new taxpayer bailout funds into the company.

“Where were they when they were about to hand them a check for $30 billion on this issue?” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “It is hard to believe they were truly surprised about these bonuses a mere two weeks later.”

Sen. Richard C. Shelby, the ranking Republican on the Senate Banking Committee, stopped just short of calling for the resignation of Treasury Secretary Timothy F. Geithner, whom he said should have known about the $165 million in bonuses being paid to a company that drew $180 billion in federal bailout cash.

“He works for the president of the United States. But I can tell you, this is just another example of where he seems to be out of the loop,” Mr. Shelby said.

Democrats, meanwhile, threatened to use whatever powers needed to draw back the bonuses — and looked for ways to deflect blame from Sen. Christopher J. Dodd, the Connecticut Democrat who inserted a clause into the congressional bailout bill that protected executive compensation.

Senate Majority Leader Harry Reid, a Nevada Democrat, sidestepped questions over the Dodd amendment in the $787 billion stimulus law, which set new compensation limits for companies in future bailouts but did not apply retroactively to bonus contracts such as those awarded by AIG.

“There’s always more we can do, and hindsight’s 20-20,” Mr. Reid said.

Mr. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.

Democratic lawmakers led a charge to impose new taxes to recoup at least some of the $165 million in bonuses that AIG awarded to executives and traders. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, was readying a bill that would impose taxes of 90 percent or more on the bonus money given to top AIG executives.

AIG paid bonuses of $1 million or more to 73 employees, including 11 who no longer work for the company, New York Attorney General Andrew Cuomo said Tuesday. The top individual bonus was more than $6.4 million, and the top seven received more than $4 million each.

For his part, Mr. Obama stayed mum on the issue Tuesday. He left to his spokesman the defense of Mr. Geithner, who has been harangued for failing to stop the bonuses.

Asked during his daily White House briefing whether Mr. Obama is satisfied that he found out about the bonuses in a timely fashion, spokesman Robert Gibbs said: “Yes, the president is satisfied.”

“The president certainly won’t be satisfied until, moving forward, we have changed the way we do business in Washington, changed the way we do business on Wall Street, to ensure that there’s a financial regulatory system that’s in place in order not to find things like AIG happening again,” Mr. Gibbs added.

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