President Barack Obama has expressed anger at $165m (£116m) bonuses paid to executives of bailed-out insurer AIG.
President Barack Obama has expressed anger at $165m (£116m) bonuses paid to executives of bailed-out insurer AIG.
"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said.
"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said.
He also called the payments "an outrage" as he announced help for small firms hurt by the deep recession.
He also called the payments "an outrage" as he announced help for small firms hurt by the deep recession.
He has told Treasury Secretary Timothy Geithner to "pursue every single legal avenue to block these bonuses and make the American taxpayers whole".
He has told Treasury Secretary Timothy Geithner to "pursue every single legal avenue to block these bonuses and make the American taxpayers whole".
'Play by rules'
'Play by rules'
The bonus payouts to executives were announced on Sunday by US insurance giant AIG.
The bonus payouts to executives were announced on Sunday by US insurance giant AIG.
"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses," said President Obama.
"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses," said President Obama.
"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."
"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."
AIG insures financial institutions around the worldHis economic adviser Larry Summers said the recent goings on at AIG were "outrageous".
AIG insures financial institutions around the worldHis economic adviser Larry Summers said the recent goings on at AIG were "outrageous".
The $165m was payable to executives by Sunday and part of a larger total payout reportedly put at $450m.
The $165m was payable to executives by Sunday and part of a larger total payout reportedly put at $450m.
House Financial Services Committee chairman Barney Frank said the bonuses were "rewarding incompetence".
House Financial Services Committee chairman Barney Frank said the bonuses were "rewarding incompetence".
"These people may have a right to their bonuses. They don't have a right to their jobs forever," he said.
"These people may have a right to their bonuses. They don't have a right to their jobs forever," he said.
'Outrageous'
'Outrageous'
AIG has received bailouts from the US government totalling $180bn (£127bn) since coming close to collapse in 2008.
AIG has received bailouts from the US government totalling $180bn (£127bn) since coming close to collapse in 2008.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous", said Mr Summers.
"There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous", said Mr Summers.
But he admitted that, despite the strength of feeling in the White House, there was little the administration could do to stop the bonus payments.
But he admitted that, despite the strength of feeling in the White House, there was little the administration could do to stop the bonus payments.
AIG: QUICK FACTS 30 million US policy holdersOperates in 130 countriesProvides insurance to 100,000 companies and other entities
AIG: QUICK FACTS 30 million US policy holdersOperates in 130 countriesProvides insurance to 100,000 companies and other entities
"The easy thing would be to just say... off with their heads, violate the contracts. But we are a country of law. The government cannot just abrogate contracts," he said.
"The easy thing would be to just say... off with their heads, violate the contracts. But we are a country of law. The government cannot just abrogate contracts," he said.
Mr Summers said that Treasury Secretary Timothy Geithner had used all his power, both "legal and moral", to lower the payments.
Mr Summers said that Treasury Secretary Timothy Geithner had used all his power, both "legal and moral", to lower the payments.
"I don't know why they [AIG] would follow a policy that's not really sensible, is going to ignite the ire of millions of people, and we've done exactly what we can to prevent this kind of thing happening again," said Austan Goolsbee from President Obama's Economic Recovery Advisory Board.
"I don't know why they [AIG] would follow a policy that's not really sensible, is going to ignite the ire of millions of people, and we've done exactly what we can to prevent this kind of thing happening again," said Austan Goolsbee from President Obama's Economic Recovery Advisory Board.
Indeed bonuses for 2009 are to be cut sharply - by up to 30% according to AIG boss Ed Liddy - but those agreed for 2008 will be paid.
Indeed bonuses for 2009 are to be cut sharply - by up to 30% according to AIG boss Ed Liddy - but those agreed for 2008 will be paid.
Such concessions did little to appease angry senators.
Such concessions did little to appease angry senators.
"Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees?
"Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees?
"Particularly employees who got them into this mess in the first place? I think it's an outrage," said Senate Republican leader Mitch McConnell.
"Particularly employees who got them into this mess in the first place? I think it's an outrage," said Senate Republican leader Mitch McConnell.
Democrat Elijah Cummings was equally incensed: "It's like, OK, you got to help me screw you. And by the way I'm going to take your money and I'm going to slap you with it."
Democrat Elijah Cummings was equally incensed: "It's like, OK, you got to help me screw you. And by the way I'm going to take your money and I'm going to slap you with it."
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