Obama Rips AIG Bonuses

(CBS)

President Obama today weighed in on the growing outrage over $165 million in recent bonuses paid to American International Group executives, saying he's asked Treasury Secretary Tim Geithner to pursue "every single legal avenue" to block the payouts.

"This isn't just a matter of dollars and cents. It's about our fundamental values," Mr. Obama said at the beginning of a speech at the White House on lending to small business owners.

Mr. Obama said that AIG is in trouble due to "recklessness and greed."

"Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," he added. "How do they justify this outrage to the taxpayers who are keeping the company afloat?"

The president also called for Congress to take up regulatory reform of financial institutions "so we don't find ourselves in this position again."



More Coverage Of AIG Today:
White House Seeks "Mechanisms" To Recoup AIG Bonuses

$90B Of AIG's Federal Rescue Went To Banks

Here are Mr. Obama's full remarks on AIG, as prepared for delivery and released by the White House:

Updated: Here are Mr. Obama's full remarks on AIG, as delivered and released by the White House:

Now before I talk about the new steps we're taking to get credit flowing to small businesses across our country, I do want to comment on the news about executive bonuses at AIG. I think some of you have heard a little bit about this over the last few days. This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?

In the last six months, AIG has received substantial sums from the U.S. Treasury. And I've asked Secretary Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole. (Applause.) I want everybody to be clear that Secretary Geithner has been on the case. He's working to resolve this matter with the new CEO, Edward Liddy -- who, by the way, everybody needs to understand came on board after the contracts that led to these bonuses were agreed to last year.

But I think Mr. Liddy and certainly everybody involved needs to understand this is not just a matter of dollars and cents. It's about our fundamental values. All across the country, there are people who are working hard and meeting their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. You've got a bunch of small business people here who are struggling just to keep their credit line open -- that they are foregoing pay, as one of our entrepreneurs talked about, they are in some cases mortgaging their homes, and doing a whole host of things just in order to keep things afloat. All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules. And that is an ethic that we have to demand.

And what this situation also underscores is the need for overall financial regulatory reform, so we don't find ourselves in this position again, and for some form of resolution mechanism in dealing with troubled financial institutions, so that we've got greater authority to protect American taxpayers and our financial system in cases such as this.

Now, we already have resolution authority -- excuse me, I'm choked up with anger here -- (laughter) -- we always -- already have some of that resolution authority when it comes to a traditional bank. But when you start getting into AIGs and some of these other operations that have a whole bunch of different financial instruments, then we don't have all the regulatory power that we need. And this is something that I expect to work with Congress to deal with in the weeks and months to come.

More AIG Related Coverage:

Poll: Frustration Growing Over Bailouts

Can AIG Get The Bonus Money Back?

Are We Taxpayers – Or Suckers?

Will AIG Flap Lead To Obama Backlash?

N.Y. AG Wants Answers On AIG Bonuses

White House Seeks "Mechanisms" To Recoup AIG Bonuses

[rwassel]

To all the geniuses on here trying to blame Obama for this AIG fiasco:

BUSH WAS PRESIDENT, AND OVERSAW THE ALLOCATION OF THE FUNDS!

(Sorry, I rarely use all caps, but sometimes it's needed to get through to some of these unpatriotic, right-wing neo-cons.)

[ivehadit9]

bailiff007~~

Ron Paul is an old man. He ought to retire. In fact, Ted Kennedy and John McCain ought to retire too, so they can stop screwing America.

[bailiff007]

Without Ron Paul in 2010, the USSA might end up numbering about 13 states again, tops. He's the only man with the shoes, knowledge, intellect, & dedicated team to fill the job.

Why not GIVE PEACE A CHANCE, or is that too Canadian for ya'll?

Gov. Jesse, are U training with VP Dr. Paul today?

mises.org

[abbe91]

Now, I'd like to know how these bonuses are supposed to be paid ... cash or restricted stock ?

[turnerjt]

If the President and our govt want to see wall street turn around and more importantly, Americans to have confidence again in our govt. DO SOMETHING NOW ABOUT AIG. NO MORE BAILOUT FUNDS NO BONUS. No matter what the consequences. Let them be unemployed.
And while you're at this, take EVERYTHING Mr/Mrs Madoff have stashed. She knew what was going on and should suffer more than the people they stole from for years. When I see AIG get their "comings" I'll know I voted for the right man.

[abbe91]

"Notice none of the dumb liberals are pointing the finger at Obama and his administration for giving all of this free money to AIG to begin with."
Posted by WereNotGonnaTakeIT at 10:21 PM : Mar 16, 2009

For a very good reason, but you need to read the article:
"The financial bailout program remains politically unpopular and has been a drag on Mr. Obama's new presidency, even though the plan began under his predecessor, President George W. Bush"

Bush gave them the money ...

[despido]

Hey Barack! Keep the morons distracted while we raid the Treasury.

[McHineguy]

You idiot repugs want to blame this mess on anyone except the fools who started this mess, YOU MORONS!! Your boys Bush and Cheney started this and the Obama administration now has to deal with the mess!!! Thank all you idiots that voted for the worst president we have EVER HAD !!!
Posted by rebelscout at 10:42 PM : Mar 16, 2009

You sir need to do some reading. BOTH partys were asleep on the job for this mess. I cna point to numerous times that Barney Frank, Chris Dodd, and others prevented the Repubs from investigating fannie Mae and Freddie Mac. You can point to the Repubs wanting to leave the stock market alone. So, Obama has a mess to clean up. So far, he isnt doing very well. Neither are supporters like you.

[ivehadit9]

Obama is a phony -- he has no idea what he is doing. The media, unions, ACORN, CAIR, and other terrorists purchased the presidency...

Posted by dmb35 at 5:22 PM : Mar 16, 2009

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I guess you?re one of those partisan lunatics who doesn?t root for America unless there?s a Republican in the WH.

FYI, I disagree with much, much more of what Bush did than what I fear Obama is gonna do. Regardless of his values, Bush was so damaging to this nation in so many ways that if I was in the crowd during Inauguration Day, I would?ve been singing hah hah, nah nah, heh heh.

Obama is gonna bring the troops back from Iraq by next year. That?s good. That means no more bloodshed, no more trajedies, no more tears, and no more wartime taxes. The U.S. shouldn?t be a nanny to another country, at taxpayers? expense, and telling them how they should govern. Remember the Bush policy of letting the Mexican trucks come into America without restrictions??? Well, Obama is gonna discontinue that or he may well have done it already. With the gang wars escalating in Mexico and, in many cases, spilling over into U.S. soil and even into Canadian soil, it's just common sense. It is simply too dangerous and risky to continue that Dubya policy.

[ivehadit9]

How about telling them "no more money"? How do you blame President Bush for this when the Democrats are in charge of the purse strings and have been for the last three years?
Posted by winstrv at 9:14 PM : Mar 16, 2009
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Yeah, but how about 2001, 2002, 2003, 2004,... Bush had the majorities in Congress during all those years and they didn't do a damn thing to stop it.