White House: We're Trying To Block AIG Bonuses

There's something very wrong with our political system, weighted as it is in favor of corporate-friendly candidates and policies. It's not reassuring that the administration didn't see this coming:

WASHINGTON — President Obama and his top economic advisers scrambled to calm a nationwide furor on Monday over bonuses paid at the American International Group, even as administration officials acknowledged they had known about the issue for months.

Which means they didn't see anything wrong with it, right? Talk about tone deaf!

One day after the economic advisers insisted that their hands had been tied by contracts requiring the payments, Mr. Obama ordered the Treasury Department to “pursue every single legal avenue to block these bonuses” and make the American taxpayers whole.

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury,” Mr. Obama said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

Well, Mr. President, as Yoda once said, "What is this 'try'? There is do, and do not."

But as anger from lawmakers escalated and criticism of the retention bonuses overshadowed other news for a second consecutive day, White House and Treasury officials offered only a general sense of how they would carry out Mr. Obama’s order and few explanations for why they had not acted earlier.

White House officials said the Treasury would recapture the bonus money by writing new requirements into a $30 billion installment of government aid scheduled to go soon to the ailing insurance conglomerate. The government has already provided $170 billion in taxpayer assistance to keep A.I.G from failing and now owns nearly 80 percent of the company.

But administration officials conceded that almost all of the most recent round of bonuses, totaling $165 million, had been paid last Friday, one day before the Treasury publicly acknowledged that it had reluctantly approved the payouts. The officials said that people who received the bonuses would probably be able to keep them.

By seeking to link repayment of the bonus money to the coming $30 billion in assistance, the administration seemed to leave open the possibility that the company would effectively be repaying taxpayers with taxpayer money. A Treasury official disputed that taxpayers would be repaying themselves, but could not specify how else the company would give back the money.

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