2009-03-19 09:40 AM
President Barack Obama pressed his case for an expensive budget on Wednesday while anger over bonuses paid at bailed-out insurance giant AIG threatened to overshadow his economic agenda.
During a trip to California, a state that has been hard hit by the recession, Obama tried to defuse criticism about the AIG payouts and pledged to seek tools to prevent a repeat of the same situation with other financial institutions.
"Listen, I'll take responsibility. I'm the president," he told a cheering crowd of some 1,300 about the AIG scandal. "I know a lot of you are outraged about this -- rightfully so. I'm outraged too," he said of the $165 million in bonuses given to top officials at American Insurance Group Inc, which accepted $180 billion in government aid to keep it from going under.
"It's my job to make sure we fix these messes even if I don't make them."
At a brief White House news conference before his trip, Obama expressed confidence in Treasury Secretary Timothy Geithner, who has come under harsh criticism over the bonuses, and his economic team, many of whom stood at his side.
"Just as outrageous is the culture that these bonuses are a symptom of, that have existed for far too long -- a situation where excess greed, excess compensation, excess risk-taking have all made us vulnerable," he said in Washington.The firestorm over AIG and its business-as-usual bonuses threatens Obama's image as a crusader for change and could undermine his efforts to pull the economy out of a deep recession and pass his record $3.5 trillion budget.
Obama said the administration was developing a proposal to create a "resolution authority" with powers over institutions like AIG, similar to the FDIC's ability to shut down insolvent banks.