- The Washington Times - Wednesday, March 18, 2009

WASHINGTON (AP) - President Barack Obama, saying “the buck stops with me,” said Wednesday he wants legislation to give the federal government vast new powers over financial institutions like failed AIG to protect the public.

He spoke at the White House as the chairman of the American International Group, Edward Liddy, took the hot seat to tell Congress he was as angry as everyone else at “distasteful” multimillion-dollar bonuses paid to AIG employees at the same time the company was accepting federal bailout money.

But Liddy gave no indication he would try to get the bonus money back, as the president and many in Congress have suggested.

He did reiterate AIG’s position that the contracts providing the bonuses were binding. “When you owe someone money, you pay that money back,” Liddy maintained.

“We don’t intend to harass you here before this committee,” Rep. Paul Kanjorski, D-Pa., said just after Liddy was sworn in to testify under oath. “We just want to set the record straight,” Kanjorski said.

Obama, speaking to reporters at the White House, said the new powers he is seeking would be similar to those now exercised over banks by the Federal Deposit Insurance Corporation. It would be part of the administration’s broader package of new finance regulatory steps, he said.

Since AIG is an insurance company and not a bank, it is not subject to the same oversight.

“We’ve got a big mess that we’re having to clean up,” the president said. “Nobody here drafted those contracts” that resulted in $165 million in bonuses being paid out to AIG employees over the weekend, he added.

Obama also defended his administration _ and specifically Treasury Secretary Timothy Geithner _ against questions about how it has handled the AIG fiasco.

“Nobody here was responsible for supervising AIG and allowing themselves to put the economy at risk by some of the outrageous behavior that they were engaged in,” Obama said. “We are responsible, though,” he added.

“The buck stops with me. And my goal is to make sure that we never put ourselves in this kind of position again.”

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