Obama, Congress Blast AIG Plans for Employee Bonuses

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• JIM LEHRER:

  The anger over insurance giant AIG dominated the public discourse in Washington and elsewhere today. President Obama and members of Congress attacked new bonuses paid by the company after it received federal help to stay in business.

  Ray Suarez has our lead story report.

• RAY SUAREZ:

  The president led the wave of condemnation over the way AIG is spending $170 billion in taxpayer money.

  BARACK OBAMA, President of the United States: 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?

• RAY SUAREZ:

  The storm erupted Saturday, when the company disclosed the $165 million in bonuses paid out yesterday. That figure is part of a larger payout, valued at $450 million in bonuses and other incentives. Much of the money went to a unit that lost $40 billion last year insuring securities tied to high-risk mortgages.

  AIG's new CEO, Edward Liddy, said he finds it distasteful, but the bonuses were legally promised before the company accepted funds from the Federal Reserve. But President Obama said the real issue is about fundamental values.

• BARACK OBAMA:

  All across the country, there are people who are working hard and meeting their responsibilities every single day without the benefit of government bailouts or multimillion-dollar bonuses. 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.

• RAY SUAREZ:

  In Albany, New York State Attorney General Andrew Cuomo said he hopes to enforce those rules by issuing subpoenas about the bonuses.

  AIG also reported using $90 billion in federal aid to reimburse U.S. and European banks for mortgage losses and other transactions. Of that, nearly $13 billion went to Goldman Sachs, and $12 billion went to cities and towns under investment agreements with the company.

  In Congress today, lawmakers on both sides of the aisle vented their frustration. Senate Majority Leader Harry Reid.

  SEN. HARRY REID (D-NV), Senate Majority Leader: These executive bonuses are beyond even outrageous. I don't know what a term is that is more definitive than outrageous, but outrageous does the trick.

• RAY SUAREZ:

  Republican Jeff Sessions also lambasted AIG, but he said the government shared the blame.

  SEN. JEFF SESSIONS (R), Alabama: If your government — our government — had acted properly, we would have allowed this company to go forward in a controlled, orderly process, through reorganization under Chapter 11, and we wouldn't have this bonus embarrassment.

• RAY SUAREZ:

  The rescue of AIG last September was the first and is so far the biggest by the federal government. But the company has continued to post massive losses, more than $60 billion in the fourth quarter alone. And AIG has become the focus of the growing public anger over financial rescues in general.

  That's reflected in a new poll by Andrew Kohut of the Pew Research Center for the People and the Press in Washington.

• ANDREW KOHUT, President, Pew Research Center:

  As much as 48 percent of the public is saying they are angry about the government bailing out companies because of their own poor performance.

• RAY SUAREZ:

  So has this sentiment about the financial crisis begun to accumulate in a way that's affecting the way the public feels about President Obama?

• ANDREW KOHUT:

  Even though Obama's ratings are still high, although a little bit less high than they were a month ago, the public ultimately is frustrated by many aspects of the financial rescue and trying to deal with these economic problems, and the president will begin to pay some price for that.

• RAY SUAREZ:

  The president made clear today he'll try to make AIG pay a price. He said he's asked Treasury Secretary Geithner to use every legal avenue to block the bonuses.