posted March 17, 2009 10:27 AM            

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Do we really have to foot the bill for those bonuses at the American International Group?

It sure does sting. A staggering $165 million — for employees of a company that nearly took down the financial system. And heck, we, the taxpayers, own nearly 80 percent of A.I.G

It doesn’t seem fair.

So here is a sobering thought: Maybe we have to swallow hard and pay up, partly for our own good. I can hear the howls already, so let me explain.

Everyone from President Obama down seems outraged by this. The president suggested on Monday that we just tear up those bonus contracts. He told the Treasury secretary, Timothy F. Geithner, to use every legal means to recoup taxpayers’ money. Hard to argue there.

“This isn’t just a matter of dollars and cents,” he said. “It’s about our fundamental values.”

On that last issue, lawyers, Wall Street types and compensation consultants agree with the president. But from their point of view, the “fundamental value” in question here is the sanctity of contracts.

That may strike many people as a bit of convenient legalese, but maybe there is something to it. If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.

As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts.

posted March 17, 2009 03:18 PM            

I say the money has become air now. No one knows where its gone .

The politicians the corporate execs, the lenders and the home builders are all sleeping with each other.

I say we need people like Tony Soprano to deal with AIG people who demands bonus be paid.

Aren't we caught up in this big game.
I mean majority who don't pay taxes are not affected , its the middle class that the tension of this game is really felt. I see signs of marxisms all over.

Forget about owning homes .... Forget about sending children to colleges ...etc etc...

Jeez what sh1t is going on.

posted March 17, 2009 04:18 PM            

Now, Americans are pi$$ed about bailouts in general and O'Bomber, Dodd, Frank, Schumer and others are posturing and attempting to shield themselves from blowback from pi$$ed off Americans.

You can go here and see for yourselves. http://www.opensecrets.org/indivs/index.php?capcode=st39m&name=&state=&zip=&e mploy=AIG&cand=obama

posted March 17, 2009 04:44 PM            

Kabuki Theater of Outrage, Act III. Unscrupulous borrower Sen. Chris Dodd struts on stage. Fox Business reporter Rich Edson turns on the spotlight:

Senator Outrage

Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group (AIG: 0.9768, 0.1967, 25.21%) bonus recipients so the government could recoup the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax.

While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.

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

Need to make my airsickness bag triple-strength this morning.

Update: David Freddoso has more…

Here is the loophole, from the section of the stimulus package that deals with compensation rules for TARP recipients:

The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.

posted March 17, 2009 05:03 PM            

The old addage...if their lips are moving, they're lying is a phrase to take seriously.

O'Bomber's job approval ratings are falling. In January they were at 65% of those who somewhat approved. Today they're down to only 56% who somewhat approve of the job O'Bomber is doing. 37% strongly approve and 32% strongly disapprove. O'Bomber's approval ratings are going down and his unfavorable ratings are going up.

That's lower than Bush after 2 months in the White House.

posted March 17, 2009 06:36 PM            

Did anyone know that Goldman Sachs, Bank America and other US banks also got AIG bailout money?

So, now there's outrage in Congress and elsewhere that 165 million is being spent by AIG for employee bonuses. Where's the outrage over AIG bailout money being used to prop up foreign banks..like France’s Société Générale and Germany’s Deutsche Bank?

posted March 18, 2009 12:15 AM            

quote:

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That's lower than Bush after 2 months in the White House.

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posted March 18, 2009 12:28 PM            

Analysis: White House, Dems backpedaling on AIG

WASHINGTON – For the first time since last fall's election, Democrats and the Obama administration are backpedaling furiously on an issue easily understood by financially strapped taxpayers: $165 million in bonuses paid out at bailed-out AIG.

Republicans, struggling to regain their political footing, are content to let Democrats try to dig their way out of this mess on their own.

Professing shock at the bonus payments, Democrats have embarked on a hurry-up effort to impose what amounts to confiscatory taxes on the bonuses, a maneuver that almost surely will be tested in the courts.

Treasury Secretary Timothy Geithner enjoys President Barack Obama's confidence, according to the White House.

But the mood is less charitable among congressional Democrats. Republicans have made Geithner their top target, not surprising given Obama's continued high approval ratings.

"It's shocking that they would — the administration would come to us now and act surprised about these contracts," said Sen. Mitch McConnell, R-Ky., the Senate GOP leader. "This administration could have and should have ... prevented this from happening. They had a lot of leverage two weeks ago."

That would be when the Treasury Department decided to make an additional $30 billion available to American International Group Inc., the huge insurance conglomerate deemed too big to fail by two administrations.

Which goes to the crux of the Democrats' current political problem.

Gone are the days when they could merely bludgeon the Bush administration and promise to seek bipartisan solutions to the nation's economic problems.

Now, in control of the White House and Congress, they are struggling to come up with an explanation for what no one in either party seems moved to defend.

Senate Majority Leader Harry Reid, D-Nev., said AIG stands as a symbol of "greed and perhaps corruption."

Sen. Max Baucus, D-Mont., scoffed at AIG's claim that the money represents retention pay. "There are enough bright people in this country that would do the job for an honest salary, and enough honest taxpayers demanding that we put an end to this stuff. You can bet I'll make sure justice is served," he said.

But the bonus payments occurred on the Democrats' watch, and for Republicans, AIG seems politically providential.

Their overwhelming opposition to last month's stimulus bill appeared to be gaining little traction as Democrats showcase every shovelful of dirt that is turned — all in the name of economic recovery.

Criticism that Obama and Democrats are embarking on a new era of tax-and-spend is undercut by the lack of a budget alternative from Republicans — the party that presided over a historic run-up in the federal debt earlier this decade when it controlled both the White House and Congress.

Less than 100 days into the Obama administration, polls have brought little good news to Republicans.

While a recent Pew survey found some slippage in Obama's support, it also registered only 28 percent approval for the job being done by GOP congressional leaders, the lowest in nearly 14 years. And a separate survey by CNN and Opinion research Corp. put support for the president's handling of the economy at nearly 60 percent.

Against this backdrop, White House press secretary Robert Gibbs sought to explain AIG.

He told reporters that Geithner "last week engaged with the CEO of AIG to communicate what we thought were outrageous and unacceptable bonuses," and "received a commitment to lessen some of the bonuses for senior executives...."

Asked directly Obama is satisfied that he found out about the bonuses in a timely fashion, Gibbs said: "Yes, the president is satisfied."

The president "has complete confidence" in his Treasury secretary, Gibbs added, although Geithner's early tenure has been anything but smooth. The Cabinet official's introduction of a new plan to bail out the financial industry was widely panned, and his confirmation was held up earlier when it was disclosed he had paid $34,000 in back taxes.

Obama himself has been vocal on the need to do everything possible to recoup the money paid out in bonuses, and so far, no Democrats in Congress have tried to hold him to account.

But the Treasury Department isn't immune, even from Democrats.

"I'm outraged by this," said Baucus in a statement. "At one point the Treasury was in a position to stop these bonuses. Those were the terms of TARP, terms that I helped draft."

But talk of legislation only leads to more uncomfortable questions for Democrats.

Sen. Olympia Snowe, R-Maine, and Ron Wyden, D-Ore., won passage of a provision earlier this year that they said would have prevented the type of payments now at the center of a storm.

It was dropped without explanation in the final compromise on the economic stimulus measure, replaced by a less restrictive set of conditions backed by Sen. Christopher Dodd, D-Conn., and accepted by the White House.

"The president goes out and says this is not acceptable and then some backroom deal gets cut to let these things get paid out anyway," said Wyden.

_____

EDITOR'S NOTE: David Espo is AP's chief congressional correspondent.

posted March 18, 2009 03:53 PM            

Not one Republican in the House of Representatives voted for the so called..stimulus bill..Porkulus.

In the Senate, only 3 Republicans voted for the bill. Olympia Snow, Susan Collins and Arlen Specter.

In the Senate version of the bill, Snow wrote language which would have limited bonuses to $100,000 for personnel of companies getting financial aid from the federal government.

That language was stripped out of the bill in Conference Committee meetings. Those meetings were attended by demoscats who are in the majority in both houses of Congress and in the White House too.

"ABC News' Jonathan Karl reports: During late-night, closed-door talks last month, negotiators for the House, Senate and White House stripped out a measure to the stimulus bill that could have restricted the AIG bonuses.

Here's the story:

Last month, the Senate unanimously approved an amendment to the stimulus bill aimed at restricting bonuses over $100,000 at any company receiving federal bailout funds. The measure, which was drafted by Sen. Olympia Snowe, R-Maine, and Sen. Ron Wyden, D-Ore., applied these restrictions retroactively to bonuses received or promised in 2008 and onward.

But then...

posted March 19, 2009 12:11 PM            

Now, it turns out those bonus protections were put in the bill...at the request of the O'Bomber administration.

Dodd Blames Obama Administration for Bonus Amendment (Update2)
By Ryan J. Donmoyer

March 19 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd said the Obama administration asked him to insert a provision in last month’s $787 billion economic- stimulus legislation that had the effect of authorizing American International Group Inc.’s bonuses.
http://www.bloomberg.com/apps/news?pid=washingtonstory&sid=aT_tMXRy2vDs

posted March 19, 2009 05:50 PM            

AIG is now a Government owned enterprise . Gone are the days of exuberance.

They have a choice - don't let government interfere.