Obama Administration takes heat over AIG bonuses

The outrage over bonuses being paid to executives of the bailed out insurance giant AIG is morphing into accusations aimed at President Obama and his controversial Treasury Secretary, Tim Geithner. 

Could they have nipped what some see as a ripoff in the bud?
Both sides agree they’re outraged.

The disagreement is over who to blame.  Just AIG or the Treasury Department too?
Did Treasury Secretary Tim Geithner blow the issue of AIG bonuses? 

He’s President Obama’s point man on the Wall Street bailout.

But when AIG got 30 billion more in federal aid two weeks ago
republicans charged the Treasury Secretary stumbled on the issue of what AIG calls incentives.

“That he didn’t in fact make it clear that they couldn’t use any of that money to provide bonuses,“ said republican Congressman John Boehner of Ohio. 

Top Obama aides are defending Secretary Geithner.

“As soon as he learned about these bonuses he was focused on them - was in touch with the company, was making clear the government’s expectations within the law,“ said Lawrence Summers, Director of the Council of Economic Advisers.

AIG says under the law it has to pay the bonuses.

Its traders have contracts that guarantee them.

Democrats don’t buy it.

“I think we should be suing to get those bonuses back” said democratic Congressman Barney Frank of Massachusetts.

Some democrats want a one-time tax

“Recipients of these bonuses will not be able to keep all their money,“ said democratic Congressman and Majority Leader Harry Reid of Nevada.

Meanwhile, President Obama is trying to sell his plan to tackle health care, education and energy reform in the midst of the Wall Street and economic crises.

“To kick these problems down the road for another four years or another eight years would be to continue the same irresponsibility that led us to this point,“ said the President.

But distracting attention from that pitch is what some see as AIG’s irresponsibility and team Obama allowing it.