Calls Begin for Geithner to Resign

Posted March 18, 2009 at 11:22am

Rep. Connie Mack IV (R-Fla.) became the first lawmaker to call for Treasury Secretary Timothy Geithner to resign, blasting the Obama administration’s “oft-demonstrated inability to lead and act appropriately— in the wake of the American International Group’s bonus scandal.

Geithner should “either resign or be fired from his position,— Mack said in a statement.

“Quite simply, the Timothy Geithner experience has been a disaster,— Mack said. “The Treasury Department is in disarray. Taxpayer dollars are being wasted. America’s economy hangs in the balance. America needs and deserves a Treasury Secretary who can truly lead us forward.—

Mack’s call comes amid widespread anger over AIG’s distribution of some $165 million in executive bonuses. The payout comes despite the fact that the insurer has received billions in government bailout help, which gave taxpayers 80 percent equity in the firm.

Geithner was confirmed as Treasury secretary on Jan. 26 by a partisan, 60-34 vote. His installment followed a lengthy confirmation process that was interrupted by revelations that he owed $34,000 in back taxes. Opponents, mostly from the Republican ranks, were critical over his role in the $700 billion federal bailout of private Wall Street firms last fall, in addition to his tax blunder. That bailout was separate from AIG’s federal lifeline.

Despite the steady stream of floor statements over AIG’s actions, Members have mostly held off in calling for Geithner to step down. The White House has continued to voice confidence in the secretary.

Sen. John McCain (R-Ariz.) said Geithner’s woes stem in part from a lack of deputies at the Treasury Department, a sentiment that was echoed by Sen. Joe Lieberman (ID-Conn.)

“I don’t think that’s the answer here. I think there’s way to deal with the situation,— Lieberman said.

Lawmakers on both sides of the Capitol are moving quickly to revoke the AIG bonuses. The Senate Finance Committee will release a proposal as soon as Wednesday that would tax the money at 70 percent, and on the House side, the Judiciary Committee will mark up legislation to authorize the attorney general to recover the compensation.

Meanwhile, Republican Sens. David Vitter (La.), Jim DeMint (S.C.) and Jim Bunning (Ky.) requested the Banking, Housing and Urban Affairs Committee subpoena the AIG contracts inked last year that detailed the executive bonuses.

“Since the very beginning of these federal bailouts, we have seen mishap after mishap at the taxpayer’s expense,— Vitter said in a statement. “The public has a right to understand how these bonuses came to be and what the Treasury knew about the contracts prior to the recent press reports since it is their tax dollars that paid for it.—