Financial Mess Dominates Sunday’s Talk

Posted March 15, 2009 at 11:34am

Anger over hundreds of millions of dollars in bonuses to employees at bailed-out insurer AIG and debate over President Barack Obama’s budget and efforts to rescue the economy dominated the Sunday talk shows.

Obama’s economic team and lawmakers from both parties expressed frustration and outrage over the bonuses paid to AIG executives.

Appearing on ABC’s “This Week with George Stephanopoulos,— Lawrence Summers, director of the National Economic Council, called the AIG situation “outrageous— and said the Obama administration will do what it can to rein in the bonuses. But Summers cautioned that the administration is unable to break contracts already signed by the company.

On “Fox News Sunday,— House Financial Services Chairman Barney Frank (D-Mass.) said Congress would look into the issue but also cautioned that legislation can’t violate AIG’s contract obligations. But he added the people responsible for the bonuses should lose their jobs.

Senate Minority Leader Mitch McConnell (R-Ky.) said on “This Week— that he’s concerned the situation could send a signal to other companies thinking of taking taxpayer money to quickly sign contracts before they are bailed out, and said he expressed concern about the management of AIG last fall to then-Treasury Secretary Henry Paulson.

McConnell said he and his GOP colleagues are concerned about how the Obama administration is handling the financial rescue and remain “very skeptical— about supporting another installment.

“I have been very, very skeptical of everything that’s happened since the original rescue package,— McConnell said.

Obama officials declined to say whether they would seek additional financial rescue or stimulus packages, although they signaled that a new initiative to help small businesses would be formally announced Monday and that details of a plan to invest in bad bank assets are forthcoming.

Obama chief economist Christina Romer said on NBC’s “Meet the Press— that it is too early to talk about a second stimulus package, but she did not rule one out.

“The president has always said we’ll do whatever it takes if it doesn’t work,— she said.

But she said the actions already taken by the administration on banking, housing and the stimulus amount to “the biggest, boldest recovery plan in history. …We fully expect it to work,— she said.

Romer also poured cold water on talk that Obama might support plans pushed by some Democrats and Republicans to help pay for health care by taxing some employer-provided health plans.

“He is absolutely opposed to it,— she said, but she refused to say whether he might change his mind.

And Romer acknowledged a tradeoff in the Obama administration because of tough ethics rules against hiring lobbyists and others.

“It does tie your hands on hiring some people,— she said, after being asked about slow hiring at the top of the Treasury Department. “It’s worth it to have honesty and accountability and a sense of confidence for the American people.—

Republicans, meanwhile, continued to attack Obama’s budget, charging that the administration was using the economic crisis to push through liberal spending plans while increasing taxes.

House Minority Whip Eric Cantor (R-Va.) said on “Meet the Press— that the Obama administration hasn’t focused enough on the economy and helping small businesses, and he criticized proposals for higher taxes.

“If we’re going to get things going again, how can we have a budget that doubles the debt on our children?— Cantor asked. “How can we say that we’re going to raise taxes on the job creators?—

Cantor said Republicans would work to sustain any Obama vetoes on “pork barrel— spending bills and would back him if he sought to cut already-passed earmarks later this year.

Cantor ripped the proposed cap-and-trade legislation on carbon emissions as the wrong prescription.

“Everybody that pays an electric bill will have an additional tax. Everybody that pays a gas bill will have a tax. Everybody that buys anything manufactured in this country will essentially have an $800 per man, woman and child tax.—

Former Vice President Dick Cheney also made news on CNN’s “State of the Union,— saying that the Bush administration accomplished “nearly everything we set out to do— in Iraq and charged Obama had made the country less safe since he took office.

Cheney refused to say “mission accomplished— on Iraq. “I wouldn’t use that, just because it triggers reactions that we don’t need,— he said, but he said the administration had succeeded in creating a democracy in the heart of the Middle East.

He also said that Obama has made the country less safe because of actions such as ordering the closing of Guantánamo Bay, and he said Obama appeared to view the war against terror as a law enforcement action rather than a war.

“He’s making some choices that in my mind will raise the risk to the American people of another attack,— Cheney said.

Cheney said that he could not name specifics, but said a “great many— terrorist attacks were disrupted because of the policies the Bush administration put in place.

And Cheney said that the Bush administration should not be blamed for the financial crisis.

“I don’t think you can blame the Bush administration for the creation of those circumstances,— Cheney said. “It’s a global financial problem. We had, in fact, tried to deal with the Fannie Mae and Freddie Mac problem some years before with major reforms and were blocked by Democrats on the Hill, Barney Frank and Chris Dodd. So I think the notion that you can just sort of throw it off on the prior administration, that’s interesting rhetoric but I don’t think anybody really cares a lot about that.—