"Lawmakers channeled their raw outrage Tuesday into a competition to see who could hammer AIG the hardest for doling out $165 million in bonuses after getting a $170 billion taxpayer bailout."
AIG CEO Edward Liddy's op-ed in the Washington Post: "No one knows better than I do that AIG has been the recipient of generous amounts of government financial aid. We are acutely aware not only that we must be good stewards of the public funds we have received but that the patience of America's taxpayers is wearing thin. Where that patience is especially thin is on the question of compensation."
In addition to the op-ed, here's a preview of what you'll likely hear from Liddy today during a hearing before House Financial Services: AIG management says they pushed last year for employees to give up their retention bonuses. "We suggested that early on, but there are people who feel this money was due them," a source close to the company told The Hill, adding, "It's terrible; it's disheartening."
"AIG could have decided to keep the money, but determined it might then have had to pay $1 billion in damages in legal fees and lawsuits, more than double what it was contractually obligated to pay the division's employees in bonuses. It also figured it would have lost the quants, something Liddy and others felt they couldn't risk." Quants are the "people who put together the computer-programmed algorithms behind the complicated hedges and trades that brought down the company."
Here's the AP's preview, which also notes that Liddy will reluctantly defend the bonuses.
"The bonuses that the American International Group awarded last week were paid to 418 employees and included $33.6 million for 52 people who have left the failed insurance conglomerate, according to the office of the New York attorney general," the New York Times says. Those payouts are expected to come under intense scrutiny Wednesday as Edward Liddy, the chief executive of A.I.G, testifies before Congress amid mounting public outrage about the bonuses, which were paid out after nearly $200 billion in taxpayer funds were pumped into the company."
The Washington Post writes, "The firestorm over bonuses paid by insurance giant American International Group has triggered alarm at other financial firms, threatening federal efforts to draw private investors into economic recovery programs. It is a critical juncture for the Obama administration. Officials at the Federal Reserve and the Treasury Department are increasingly worried that the controversy could discourage investors from joining a new government effort to revive consumer lending as well as a separate plan that relies on private money to buy toxic assets from banks, sources familiar with the matter said. Treasury officials planned to outline that second program as early as this week."
Roll Call: "A bloc of Senate Democratic moderates is quietly maneuvering to keep open the option of vetoing two of President Barack Obama's most ambitious agenda items this year -- climate change and health care reform." This is why, as Cook's Jennifer Duffy wrote last year, 60 Democratic senators don't necessarily make 60 votes.
Too much, too soon? "Barack Obama's Big Bang Theory of Governance is starting to face its first big test among the new president's fellow Democrats," Politico's Ben Smith writes, adding, "There is rising doubt among Democrats -- particularly moderates already concerned about the big costs and deficits called for in Obama's budget -- that either Obama or Washington have enough bandwidth this year to stimulate the economy, overhaul the failed financial sector and move on to a far-reaching domestic agenda."
And John McCain didn't let Cindy go on Dancing with the Stars, but Dennis Kucinich doesn't appear to have the same sway with his 31-year-old wife. "The willowy, Brit-born redhead, who may be the only Congressional spouse to sport a tongue ring, had her debut dance Tuesday [on Cleveland's version Dancing with the Stars], partnered with Cleveland dancer Rob O'Bryant," Roll Call's Heil and Brotherton write.