Tales from the Trail

As the AIG ire continues to bubble, President Barack Obama is in southern California, touring an electric vehicle plant, holding a town hall meeting with Labor Secretary Hilda Solis and finally taping an appearance on NBC’s “The Tonight Show with Jay Leno.” He’s been on the show before, back when he was campaigning for the White House, and he’s hardly alone. Aspiring presidents from John F. Kennedy to Richard Nixon to Bill Clinton have found late-night TV audiences alluring. But Obama is the first serving president to sit on the “Tonight Show” couch.

It’s expected to be a chance for Obama to push his stimulus and recovery packages, and channel the outrage over taxpayer funding for troubled companies like AIG.

Back in Washington, first lady Michelle Obama celebrates Women’s History Month by touring a school in the city’s Anacostia section and sponsoring events at 11 other schools around the area with other women accustomed to the public eye — singer-songwriters Sheryl Crow and Alicia Keys, gymnastics star Dominique Dawes, actresses Phylicia Rashad, Fran Drescher and Alfre Woodard, Google Vice President Marissa Mayer and Army Gen. Ann Dunwoody, the nation’s first female four-star general.

Photo credits:
U.S. President Barack Obama at a town hall meeting in Costa Mesa, California, March 18, 2009. REUTERS/Larry Downing
U.S. first lady Michelle Obama reads to children of military personnel at Ft. Bragg, North Carolina, March 12, 2009. REUTERS/Ellen Ozier

Lawmakers were shocked, shocked, shocked that Wall Streeters at insurance firm AIG took bonuses with one hand while grabbing a government handout with the other.

They expressed outrage at a House financial services subcommittee hearing following public outcry that millions of dollars of retention bonuses were  given to employees at AIG while the floundering company used billions of dollars of taxpayer money to try to regain its footing.

Rep. Barney Frank wanted names, names, names, of those who took the bonuses, and he posted  AIG contracts (without the names) on the Web. Advisory: they’re full of legal-speak, not easily digestible for non-lawyers.

The main event in Wednesday’s Washington circus has to be at the House of Representatives Financial Services Committee, where AIG chief executive Edward Liddy is set to testify this morning. The title of the hearing — “America International Group’s (AIG) Impact on the Global Economy: Before, During and After Federal Intervention” — doesn’t quite convey the catcalls and outrage expected. The $165 million in bonuses to AIG execs is the flash point, even though the company could get more than a $170 billion in taxpayer bailout money.

Perhaps seeking to pre-empt the hearing, or at least soften the reception he’ll get, Liddy wrote an op-ed in the Washington Post, letting readers know that “I am mindful of the outrage of the American public and of the president’s call for a more restrained compensation system. I am also mindful that every decision we make at AIG has consequences for the American taxpayer.”

Liddy isn’t the only one who could feel the heat. Scott Polakoff, the acting director of the Office of Thrift Supervision and Joel Ario, representing the National Association of Insurance Commissioners, and Rodney Clark, managing director for insurance ratings at Standard & Poor’s, are all scheduled to testify.

WASHINGTON – How outraged can they be?

U.S. lawmakers are clearly outraged by the $165 million in bonuses being paid to executives at bailed-out insurer American International Group. For the last two days, they’ve been talking about it in press releases,  at news conference and in speeches on the floor of the Senate and House.

But no one says it more colorfully and more bluntly than Republican Senator Chuck Grassley — so far.

“From my standpoint, it’s irresponsible for corporations to give bonuses, at this time, when they are so sucking the tit of the taxpayer,” Grassley said at a news conference on Tuesday.

The water in the White House fountain is green today and the presidential schedule is loaded up with Irish agenda items. It’s St. Patrick’s Day, when the U.S. chief executive could be forgiven for spelling his name Barack O’Bama.

He’s set to meet with the Irish Taoiseach (prime minister) Brian Cowen, then attend a Shamrock Ceremony, followed by remarks to the annual St. Patrick’s Day luncheon hosted by the office of the House Speaker on Capitol Hill. The president will also meet with Northern Ireland First Minister Peter Robinson and Deputy First Minister Martin McGuinness. This evening, there’s a White House St. Patrick’s Day reception.

Irish President Mary McAleese claimed Obama as a son of Ireland, “for sure, for sure,” in an interview on NBC’s “Today” program. “Even if he wasn’t, I think that we would have such faith and hope in him,” she said. “He arrived at a time when the world was in a very ugly mood of great despair. He’s really captured the imagination, particularly of young people, and that’s not easy to do.” McAleese said her son campaigned for Obama.

It’s on front pages, news shows and all over the Web: outrage at the bailout of AIG, the troubled insurance giant that — so far — has gotten $173 billion in U.S. taxpayer money and has given out $165 million in bonuses to the very executives who brought the company to its knees.

A quick Web search of “AIG outrage” for March 2009 gets 190,000 hits, ranging from Al Jazeera (“Outrage against AIG set to mount”) to USA Today (“AIG bonus outrage plays Treasury officials for saps”). Part of the outrage stems from the Obama team’s contention that there’s nothing they can legally do to stop these bonus payments.

Barney Frank, a Massachusetts Democrat who heads the House Financial Services Committee, came up with a plan in an interview on NBC’s “Today”: AIG’s execs can keep their bonuses but they don’t have to keep their jobs. “These people may have a right to their bonuses but they don’t have a right to their jobs foever,” is how Frank put it.

It’s not yet 9:00 on a Monday morning, and the federal government has already dumped another $30 billion into the tottering financial system. The money goes to insurer American International Group Inc., which just announced a fourth-quarter loss of $61.7 billion — the largest quarterly loss in corporate history.

For those keeping score at home, U.S. taxpayers have now pumped $180 billion into AIG.

Some good news: consumer spending and incomes rose in January, buoyed by salary increases for government employees.