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 | Why AIG outrage rings hollow | |
| Congress aims to revoke AIG bonuses | |
| Who's going to Gridiron? | |
| 'Complete confidence' in Geithner | |
| AIG: What's the fallout? | |
| NPR Poll: Obama Approval at 59% | |
| MI Gov Poll: Anyone's Race | |
| OH Gov: Strickland Approval Down | |
| Sound or Strong? That is the Question | |
| Steele Names RNC Communications Director |
| Obama's Statement on the Budget | |
| For Dems, Demographics Are Not Destiny | |
| Taxpayer Fleecing Must Be Stopped | |
| The Outrage Test | |
| The Republican Civil War |
March 16, 2009
Roundtable on the AIG Bonuses
Special Report With Bret Baier(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: 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.
(END VIDEO CLIP)
BRET BAIER, HOST: The bonuses the president is talking about, AIG, the insurance giant, paying bonuses, $165 million worth.
Apparently when Secretary Geithner, the treasury secretary, found out about them, he called CEO Edward Liddy, who is managing AIG's crisis for no pay, and he was told "These are legal, binding obligations of AIG. There are serious legal as well as business consequences for not paying."
So what about this bonus kerfuffle and all of the outrage here in Washington? Let's bring out our panel: New York Post columnist Kirsten Powers joins us from New York, Roll Call executive editor Mort Kondracke is here in Washington, as is syndicated columnist Charles Krauthammer.
And we're sorry again for the Brady Bunch approach to all of this, but we're in a studio getting a facelift in our regular studio.
Mort, let's start with you.
MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: As Brit said, the danger in all this is that the populist anger — and by the way, it's bipartisan, Mitch McConnell said it was outrageous along with everybody in the Bush administration — that this spread across the country and returning back to Congress is going to make it impossible for the administration to get the next big bailout that it needs, probably a trillion dollars, in order to finance the public/private partnership that it wants to do to buy up these toxic assets.
That's the real danger. And it's going to need that money. So there is going to have to be more limitations on executive pay, and that sort of thing.
In the long run, I think what you could do is you could institute a system of payback. In other words, if and when AIG gets broken up and the pieces get sold off, the first beneficiary of the proceeds would be the government, and the first item on that agenda would be these bonuses, because I don't think the bonuses themselves can be stopped.
BAIER: That is a big question. Tonight, or breaking tonight, Senator Chris Dodd from Connecticut, the Senate Banking Committee Chairman, said they're considering taxing these bonuses.
He said it's an idea very much at the embryonic stage, but they could write something as early as tomorrow to tax 98 percent of the proceeds, the taxable proceeds from the bonuses — Kirsten?
KIRSTEN POWERS, COLUMNIST, NEW YORK POST: Well, I'm of many minds on this, actually.
On the one hand, I feel like people are looking for a villain, and everybody wants to blame the so-called fat cats, when, in fact, there are probably six or seven reasons that the economy is in the situation that it's in that is not directly attributable to executives.
And I think that this is a distraction. It's a very, very tiny amount of money when you really look at the overall money that we're spending.
That said, when they talk about not being able to renegotiate these contracts or these are just set in stone and there is nothing that can be done, it does beg the question as to why when the autoworkers were asked to renegotiate their contract to take benefit and pay cuts when they got government money, and yet AIG, which is basically 80 percent owned by the federal government, is now saying that they can't alter those contracts.
There's something about that that doesn't add up. And I think as a political matter that the Obama administration is going to be in trouble if they can't do something about this, because Obama came out and said these are greedy people, and I'm not going to let that happen. And once you lay that down, you better be able to follow up on it.
BAIER: Charles?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, I think the difference with AIG and the auto companies is that AIG has its tentacles and its loan and obligations in so many places, so many other financial institutions, so many countries, that there's really a threat to the world economy.
That's why it's being rescued, not because there is a virtue or goodness among the dealers and the bankers among them. And that doesn't apply to the auto companies.
But look, this is not so much an economic issue as a psychological and a political issue. Economically, if you add up all the bonuses, it's less than 1/10 of one percent of the bailout to AIG alone, so it's lunch money.
Psychologically, it's important because there's outrage in the country, and, as Mort indicated, unless there's an appeasement in the anger in the population who are going to have to support the next bailout, which is going to be a trillion dollars, the money won't be made available, Congress will deny it.
So that's why you get the president heaping opprobrium on these miscreants who made the bad deals and now are getting the bonuses.
I'm all in favor of keeping this heaping opprobrium. I would deny them the bonuses if possible. I would be for an exemplary hanging or two. Have it in Times Square, invite Madame DuFarge. You borrow a guillotine from the French and we could have a party.
If that's what it takes to maintain popular support, let's do it. But it's not going to change anything economically.
BAIER: Last word here, Mort.
KONDRACKE: I was going to recommend boiling in oil in Times Square, but look, because these are the people who invented these crazy credit default swaps that are leading to the whole disaster.
But I have an idea that corporate America, when all of this is over, should adopt the policy that we have over at "Roll Call," and that's call profit sharing. If you make a profit, you get a share. If you don't, you don't share.
