US President Barack Obama called American International Group (AIG) reckless and greedy on Monday and pledged to try to block the insurance giant from handing its executives US$165 million in bonuses after taking billions in federal aid.
The White House said it was looking at restrictions on some US$30 billion in taxpayers’ money approved to help AIG as the administration tries to reclaim or block the huge bonuses the struggling company awarded its executives.
Obama on Monday joined other officials in criticizing AIG, which has quickly become the symbol for the ways in which federal bailouts have gone awry.
The president expressed outrage at reports that AIG went ahead with US$165 million in bonuses even though it received more than US$170 billion in federal rescue money.
Obama directed Treasury Secretary Timothy Geithner to see whether there was any way to retrieve or stop the bonus money.
“How do they justify this outrage to the taxpayers who are keeping the company afloat?” Obama asked. “This isn’t just a matter of dollars and cents. It’s about our fundamental values.”
A public backlash against Washington over the bonuses would make it tougher for Obama to ask Congress later for more bailout help — and jeopardize other parts of the recovery agenda that has dominated the early weeks of his presidency.
With that in mind, the president and his top aides were working hard to distance themselves from the insurer’s conduct, to contain possible political damage and to try to bolster public confidence in his administration’s handling of the broader economic rescue effort.
Bailout steps for AIG totaling more than US$170 billion since September had effectively left the federal government with an 80 percent stake in the insurance giant.
The bailout program remains politically unpopular and has been a drag on Obama’s new presidency, even though the plan began under former president George W. Bush.
News that AIG still needs billions in taxpayer dollars to prevent a collapse did little to build public confidence, Obama aides said.
The White House said officials were working to put strict limits on the next US$30 billion installment bound for the company.
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