In a prime time news conference last night President Barack Obama expressed again his disappointment with the payment of bonuses to executives at embattled insurer American International Group (A.I.G.) but also urged the American public to be patient as his recovery plan is implemented. In the last few days, Mr. Obama has been criticized by some Republicans and political pundits for sending mixed messages to the public. The criticism stems from the President’s attempt to convey the dire state of the nation’s economy while also expressing optimism that the nation is on the road back to recovery. It is a difficult tightrope for Mr. Obama to walk but a necessary one if he is to convince the American public that there is a plan to resuscitate the economy.
At the same time, there are suggestions that the President might be over-extending his visibility. Prior to last night’s newscast in the East Room of the White House, the President’s second briefing of correspondents, Mr. Obama had appeared last week on NBC’s “The Tonight Show” fielding questions on the economy. It is clear that the White House feels it is necessary to put on a full court press to maintain public support for President Obama’s agenda. So far, the strategy appears to be working. Earlier in the week CNN released its “poll of polls,” a compilation of four national polls, which revealed the President’s approval rating to be 63 percent; demonstrating that he still enjoys tremendous good will among the public.
The President gave an approximately 10 minute prepared statement, noticeably read from a Teleprompter, and then fielded questions from the press corps. The most memorable moment of the night came when he called upon CNN’s Ed Henry. The cable correspondent implied that the White House had been slow to respond the news of A.I.G.’s bonuses while Henry implied, by comparison, that New York Attorney General Andrew Cuomo acted swiftly. Mr. Obama, appearing somewhat bothered by the inference, fired back “It took us a couple of days because I like to know what I'm talking about before I speak.”
The news conference capped a day in Washington where the issue of corporate behavior was front and center. Earlier in the day, Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke appeared before Congress to outline a new plan that would give the government authority to take over troubled financial institutions. The Treasury Secretary, who spent a good part of his time before the House Financial Services Committee defending the administration’s response to the A.I.G. bonus fiasco, suggested that the government needed broader authority to prevent such an incident from occurring.
The government already has the power to seize banks and other institutions that take deposits insured by the Federal Deposit Insurance Corporation (FDIC). The Obama administration is now seeking the same authority for over insurance companies, investment banks, private equity firms and any other firm deemed “systemically” important to the nation’s economy. The proposal is a bold move that would give the federal government unprecedented regulatory power over private firms. House Democrats have indicated they will put the proposal on a fast track and try to bring a bill to the floor in a matter of weeks.
The A.I.G. “BonusGate” has ignited a political firestorm with protesters showing up at the homes of company executives and politicians from both sides of the aisle taking turns blasting the company. Several state attorneys generals have also taken action independent of the federal government. While President Obama expressed anger over the bonus payments and pledged to use whatever means necessary to recover the payments, House Democrats passed a special retroactive tax. The Senate has already indicated it is unwilling to go along with the tax, a move that would likely be settled by the United States Supreme Court. The White House had no direct comment on the tax but there were indications that it was not looked upon favorably by the Obama administration.
