Geithner & Bernanke Grilled About Bank Rescue Plan
POSTED: Tuesday, March 24, 2009 - 10:26am
UPDATED: Wednesday, February 17, 2010 - 2:23pm
Congress is once again trying to get to the bottom of how executives at failed insurer AIG got millions in bonuses while taxpayers were bailing them out...
The issue isn't just why AIG executives got these bonuses, but whether the Obama administration knew about them before they were paid, and why nothing was done to stop them.
AIG now almost 180 billion in debt to taxpayers is at the center of this financial crisis.
The Federal Reserve Chairman Tuesday justified the government bailout.
"Its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income, and jobs," said Chairman Ben Bernanke.
But did AIG executives, in the midst of a taxpayer rescue, need 165 million in bonuses?
"I share the anger and frustration of the American people. I found these payments, as have so many, deeply troubling." said Treasury Secretary Tim Geithner.
But could the administration, or Congress, have stopped those payments?
The Treasury Secretary says he didn't find out about the bonuses until earlier this month and that the government's hands were tied.
The executives were under contract.
Not paying them could've triggered penalties two or three times more expensive.
The chair of the New York fed told Congress taxpayers still aren't off the hook.
Congress is considering new laws allowing the government to help companies like AIG before they fail.
"When non-banks need to be put out of their misery, we need to give somebody the authority to do what the FDIC can do with banks," said Democratic Congressman Barney Frank.
That misery, now being felt by taxpayers as the government tries to keep AIG afloat.