The Rocky Mountain Collegian

Issue date: 3/18/09 Section: News

Treasury Secretary Timothy Geithner looks on at left as President Barack Obama makes remarks on AIG, Wednesday, March 18, 2009, the South Lawn of the White House in Washington, prior to departing for a trip to California. (AP Photo/Ron Edmonds)

WASHINGTON (AP) - President Barack Obama said Wednesday no one in his administration created the mess at insurance giant AIG, including the much-maligned executive bonuses, but that "the buck stops with me" to fix it.

Standing on the White House lawn as he prepared to go to California, Obama vigorously defended his embattled Treasury secretary, Timothy Geithner. Some have speculated that Geithner's job could be in danger over his handling of the millions of dollars in bonuses that American International Group Inc., is giving its executives - even in the midst of a massive federal bailout.

"There has never been a secretary of the treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who's had to deal with the multiplicity of issues that Secretary Geithner is having to deal with, all at the same time," said Obama, with Geithner standing at his right elbow.

"And, you know, he is doing so with intelligence and diligence. Nobody's working harder than this guy," Obama said.

The president told reporters that Geithner "is making all the right moves in terms of playing a bad hand."

In more pointed terms than before, the president assailed AIG for its business practices that led to the need for an infusion of tens of millions in taxpayer dollars.

"I don't want to quell anger. I think people are right to be angry. I'm angry," the president said. "What I want us to do, though, is channel our anger in a constructive way."

He said he and his economic team have begun discussions with leading congressional players to fast-track legislation creating another regulatory entity to govern the dissolution of large financial institutions such as AIG, which if merely liquidated could reverberate disastrously through the financial system.

The so-called "resolution authority" would have powers similar but not identical to those of the Federal Deposit Insurance Corporation over banks, allowing for the protection of creditors, depositors and consumers without taxpayers left "holding the bag." Obama said this broader authority would allow the government to prevent "the kinds of systemic risks that we've seen taking place" with AIG.

Continued...

Page 1 of 2 next >

Article Tools