By David Lawder
WASHINGTON, Feb 3 (Reuters) – U.S. Treasury Secretary Timothy Geithner on Wednesday said insurer AIG’s contracts to pay hundreds of millions of dollars in bonuses were “outrageous” and appealed to Congress to help recoup the payments.
Geithner said Congress could help recover the “deeply irresponsible” bonuses by passing an Obama administration proposal to levy fees on large financial firms.
“Those contracts were outrageous. They should never have been permitted,” Geithner said in testimony to the U.S. House of Representatives Ways and Means Committee.
Obama has proposed a fee on the largest financial companies to collect around $90 billion over 10 years to recoup taxpayer losses resulting from financial bailouts.
The White House has shifted to a more aggressive stance on Wall Street since the Democrats lost a Senate seat in a special election in Massachusetts in January. The election highlighted voter resentment against big banks and big bonuses in the wake of massive bailouts during the financial crisis.