Calls Intensify on Capitol Hill to Recover AIG Bonuses

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• JIM LEHRER:

  The threats and attacks on and about AIG rattled through Congress today, as the Obama administration sought to defend its handling of the insurance giant's rescue. Judy Woodruff has our lead story report.

• JUDY WOODRUFF:

  The cries from congressional Democrats were many today, but the theme was the same: Give the money back to the government.

  New York Sen. Charles Schumer took to the floor this morning.

• SEN. CHUCK SCHUMER, D-N.Y.:

  We will take this money back by taxing virtually all of it. So let the recipients of these large and unseemly bonuses be warned: If you don't return it on your own, we'll do it for you.

• JUDY WOODRUFF:

  On the House side, several Democrats called for taxing 100 percent of any bonuses over $100,000 at companies getting government help. New York Congresswoman Carolyn McCarthy.

• REP. CAROLYN MCCARTHY, D-N.Y.:

  A hundred percent, as far as I'm concerned, is not even enough. If I could tax them 1,000 percent, I would tax them 1,000 percent.

• JUDY WOODRUFF:

  AIG first announced plans for the payments more than a year ago, well before it sought government help. The furor erupted over the weekend when it was revealed the company paid out $165 million as part of the bonus program.

  Today, Republicans zeroed in on Treasury Secretary Timothy Geithner. House Minority Leader John Boehner said Geithner failed to ask the right questions when AIG sought its most recent installment of federal aid.

  REP. JOHN BOEHNER, R-Ohio, House minority leader: It was Mr. Geithner in late February who said that they had a plan to break up AIG, to sell off the parts, and to solve this problem.

  But after they reported a $61 billion loss, it was Mr. Geithner who shipped $30 billion more into AIG, and not one word has been said about solving the problem. It's time for the administration to present an exit strategy so that these types of abuses can't happen.

• JUDY WOODRUFF:

  Much of the bonus money went to a division that took huge losses linked to risky mortgages, but company officials have said they need those employees to help undo the damage.

  In addition, AIG's CEO Edward Liddy warned that not paying the bonuses would violate contracts and invite lawsuits.

  Even so, the Republican leader in the Senate, Mitch McConnell, charged today something could have been done. He said the administration blew its best chance.

  SEN. MITCH MCCONNELL, R-Ky., Senate minority leader: Wouldn't the Treasury and the taxpayer have had more leverage over AIG's executive contracts before providing another $30 billion in tax money for them? You know, once that money was handed over to AIG, the leverage was lost. That would have been the perfect time to make sure that this didn't happen.

• JUDY WOODRUFF:

  At the White House, press secretary Robert Gibbs defended the administration's actions and Geithner in particular.

  ROBERT GIBBS, White House press secretary: Secretary Geithner last week engaged with the CEO of AIG to communicate what we thought were outrageous and unacceptable bonuses, that Secretary Geithner received a commitment to lessen some of the bonuses for senior executives.

• JUDY WOODRUFF:

  As the uproar over AIG enveloped the White House, President Obama today tried to shift the focus back to his governing program. He appealed to Republicans to work with him on the budget.

• U.S. PRESIDENT BARACK OBAMA:

  If certain aspects of this budget people don't think work, provide us some ideas in terms of what you do. "Just Say No" is the right advice to give your teenagers about drugs. It is not an acceptable response to whatever economic policy is proposed by the other party.

• JUDY WOODRUFF:

  For the moment, though, the focus in Washington is to just say no to AIG bonuses. And there's more coming tomorrow: The company's chief executive goes before a congressional committee.

• JIM LEHRER:

  Ray Suarez picks up the story from there.