Obama outraged at AIG bonuses
President Obama, sometimes known as "no drama Obama," got steamed today over news that insurance giant AIG had used millions of dollars in taxpayer bailout funds to pay bonuses to employees.
Noting that AIG's problems stem from its own "recklessness and greed," Obama said, "It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay."
Obama's remarks -- read the text below -- come amid White House concern that a growing populist rage against AIG and other financial institutions on Wall Street could ricochet back to Washington and complicate efforts to pass the president's legislative reforms in Congress. The groundswell of public emotion could also challenge Obama's natural leadership style. As the New York Times' Adam Nagourney wrote this morning:
A central question for Mr. Obama is whether his cool style — “in a time of crisis, we cannot afford to govern out of anger,” he said in his address to Congress last month — will prove effective when the country may be feeling more emotional.
Obama, who asked Treasury Secretary Timothy Geithner to explore every legal means to stop AIG from paying out bonuses, did his best to showcase anger today. At one point, coughing, he apologized saying, "I'm choked up with anger."
-- Johanna Neuman
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Photo: Getty Images
Office of the Press Secretary
EMBARGOED UNTIL DELIVERY
March 16, 2009
EMBARGOED: Excerpt of the President’s Remarks Today – As Prepared for Delivery
Listed below is an excerpt of the President’s remarks, as prepared for delivery. These remarks are embargoed until delivery:
But before I talk about the new steps we’re taking to get credit flowing to small businesses across our country, I want to comment on the news about executive bonuses at AIG.
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. 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. I’ve asked Secretary Geithner to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.
I know he’s working to resolve this matter with the new CEO, Edward Liddy, who came on board after the contracts that led to these bonuses were agreed to last year.
This isn’t just a matter of dollars and cents. It’s about our fundamental values.
All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multi-million dollar bonuses. And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules.
That is an ethic we must demand.
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 we have greater authority to protect the American taxpayer and our financial system in cases such as this. We will work with Congress to that end.