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Thursday, March 19, 2009

The AIG Scandal Grows: The White House Vs. Senate Democrats

Last night there was a stunning development in the AIG scandal.

Congressional Democrats took aim at the Obama administration Wednesday, blaming the president’s economic team for creating a loophole that allowed AIG to pay its employees millions of dollars in bonuses and then not doing enough to stop the bonuses when it could.

And their warp-speed effort to get the money back made it clear that congressional Democrats don’t think the White House is moving fast enough to solve the problem now.

In an interview with CNN Wednesday evening, Senate Banking Committee Chairman Chris Dodd (D-Conn.) said that “staff-level people” at the Treasury Department pushed him to add what seemed like “innocent modifications” to an amendment he offered to the stimulus bill — and that language, in turn, made it possible for the bailed-out insurance giant to pay its employees more than $100 million in bonuses last week.

As if the scandal couldn't get any worse, now it appears that Democrats in the Senate, namely Chris Dodd, are blaming the White House for inserting language in the stimulus that allowed for the bonuses.

The scandal is now turning from bad to worse for the entire Democratic party. With the legislature blaming the White House, it's only a matter of time before the White House returns the favor. So far, the White House has no comment on the latest report.

This combines two very dangerous political dynamics. First, this is a scandal that has marked only the Democratic party. Second, we have a visible intra party fight. This scandal, now in its fifth day, is not going away and will only get worse.

This scandal will soon turn into a he said/he said. There will likely be accusations on all sides and it will likely only be directed at Democrats by other Democrats. Meanwhile, the Republicans can sit back get above the fray. The stimulus bill was slammed through the legislature. The Republicans voiced their opposition to this when it was slammed through the legislature. Meanwhile, it doesn't sound as though anyone speaking about the details of how we got here was speaking "accurately". All of this will now play out in front of the entire country, and one thing is for one involve will look good.


Anonymous said...

It is becoming clear, that everything that allegedly made Tim Geitner "indispensable" is the same stuff that should have made him ineligible for the job in the first place.

Is it so hard to find people who don't think like the people who caused this mess in the first place?

I respect Obama and all, but Geitner's got to go.

Anonymous said...

Mike, what does the title of your post mean anyway? Who are "The White"?

mike volpe said...

my bad, that should be the White House. It's fixed.

Anonymous said...

I wondered if you meant The Whites as opposed to The Reds.