AIG bonuses leave Obama in a tough spot
Public outrage over $165 million in bonus pay puts his political capital at risk.
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But for AIG, the damage is already done. It has become the face of corporate greed, and Obama is doing all he can to convince Americans that he’s as outraged as they are. On Thursday, he will appear on “The Tonight Show with Jay Leno” to talk about the economy, and it’s a safe bet that AIG will come up. Obama gets plenty of face time in the political media, and on cable TV, but by setting a new precedent – he will be the first sitting president to appear on late-night TV – he is going beyond the usual audience of political junkies and policy wonks and reaching out to “real America.”Skip to next paragraph
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Obama may also get some help from New York State’s attorney general, Andrew Cuomo, who has launched an investigation into the bonuses and threatened a subpoena to AIG to get a list of the names of bonus recipients. If Mr. Cuomo is able to get the names and they are publicized, the shame tactic could reach a new level.
In the meantime, members of Congress and interest groups are also joining the populist wave. One House member, Rep. Gary Peters (D) of Michigan, has introduced legislation that would recover the full value of the bonuses through a surtax.
One of the nation’s largest labor unions, the Service Employees International Union, announced protests to take place Thursday at financial institutions around the country. The union and other organizers say 10,000 Americans will take part in more than 100 protests in more than 30 states. The protests will call for banking reform and universal healthcare, and also show support for a controversial measure now before Congress called the Employee Free Choice Act, aimed at making it easier to form unions at businesses.
“Two weeks ago, the president’s spokesman said that they were confident that they knew how every dime was being spent at AIG,” said Mr. Boehner. “Well clearly, they didn’t know what they were talking about.”
In the past, Boehner has blamed both the Obama administration and the administration of George W. Bush for not putting forth an “exit strategy” that would put an end to government bailouts of private business.
Obama himself has repeatedly made clear that he inherited the bailout of financial institutions from Bush. But with each passing day, Obama takes on political ownership of the nation’s financial crisis.
“The initial steps to take over AIG happened on Bush’s watch, and to me, that’s the finest line of all – putting some of the blame where it belongs without looking like you’re shirking responsibility,” says Jennifer Duffy, a political analyst at the Cook Political Report. “I think that’s a line they have walked on the economy from Day 1.”