Analysis: Aig Bonuses Put Cloud Over Treasury Boss
“Secretary Geithner last week engaged with the CEO of AIG to communicate what we thought were outrageous and unacceptable bonuses,” White House spokesman Robert Gibbs said Tuesday.
Then he volunteered the answer to a question being asked all over Washington: Did Geithner still enjoy President Barack Obamas confidence, given the whopping bonuses the failed insurance giant paid Friday after receiving taxpayer bailout money?
“The president has complete confidence” in Geithner, Gibbs said.
Is Obama satisfied that Geithner informed him of the impending bonus payments in a timely fashion?
“Yes, the president is satisfied,” Gibbs replied.
Those, of course, are statements that wouldnt need to be made if Geithners status were clear. Not just a presidents confidence, but his “complete confidence” can be a well-worn political signal that the subject should start circulating a resume.
AIG is the demonized insurance giant now 80 percent owned by the government after getting $170 billion in federal bailout funds to pay money it owed to U.S. and foreign banks. Geithner told senior White House officials about the bonuses last Thursday and they in turn told Obama the same day, according to a timetable provided by the White House.
Geithner sent a flurry of letters to lawmakers Tuesday night on measures hes taking – including bringing in Attorney General Eric Holder – to try to recover as much of the bonuses as possible.
For the time being, Geithner, formerly president of the New York Federal Reserve Bank, remains a key player in the gargantuan task of slowing the worst economic downturn since the 1930s.
But his future could soon be as murky as the economys. His short tenure has been shaky at a time when the new president and the Democratic-led Congress are trying to project confidence to the markets and the nation.
When asked, Democrats issued statements of support for Geithner that ranged from concise to vague, but none called for his resignation.
Geithners nomination was dogged at the start by news that he initially failed to pay $34,023 in self-employment taxes earlier in the decade when he worked for the International Monetary Fund. As treasury secretary, Geithner oversees the Internal Revenue Service.
Not helping his cause was the news this week that Geithner failed to persuade AIG chief executive Edward Liddy to change or cancel plans to pay out the bonuses Friday.
Whatever Geithners culpability in the AIG debacle, Republicans did much to get the speculation going Tuesday by uttering the “R word,” resignation.
“I dont know if he should resign over this,” said Sen. Richard Shelby, R-Ala., the Senate Banking Committees top Republican.
The White House swiftly hit back, supported by Sen. Chuck Schumer, like Geithner a New Yorker and an early supporter of Geithners nomination.
“Secretary Geithner is a capable, smart and dedicated leader of the Treasury Department. He is the right person for the job in these challenging times,” Schumer said in response to a request for comment.