House Majority Leader Steny Hoyer (D-Md.) added a fresh welt to the bruised political hide of Treasury Secretary Timothy Geithner after his toughest week yet on the job.
While calling Geithner “very, very competent,— Hoyer criticized his failure to stop the bailed-out American International Group from going forward with $165 million in retention bonuses to executives who helped drive the finance giant into the ground.
“I’m sure he’s saying to himself at this point in time he should have acted more forcefully with the institutions involved, with AIG in particular, and said to them, Look, this is bad policy. You ought not to pursue it. You may have the legal authority to do it, but the reaction, if you do it, is going to be very severe,’ as has happened,— Hoyer said on C-SPAN’s “Newsmakers— in an interview set to air Sunday.
Responding to populist rage over the payments, the House voted 328-93 on Thursday to impose a 90 percent surtax on bonuses issued by AIG and other bailout recipients. Geithner has been blamed by Democrats and Republicans alike for not addressing the bonuses earlier and then allowing them to go ahead.
This week, with public anger at full boil, several Congressional Republicans demanded Geithner step down. Hoyer rejected those calls but signaled that President Barack Obama’s economic point man needs to shape up.
“Secretary Geithner clearly has a lot of ability, and as long as he has the president’s confidence, he should stay,— Hoyer said. “But very frankly, we ought to act and go forward in a different way and communicate more forcefully and more specifically as to what we think is appropriate given the large amounts of money these institutions have received from the public.—
Hoyer also suggested Congressional leaders will seek a balance in the days ahead between registering public anger at what is seen as irresponsible behavior on Wall Street and a more measured approach designed to keep financial firms cooperating with the federal government as it tries to stabilize the markets.
He said it is not clear whether the bonus tax bill will become law — “We’ll have to see,— he said — but added that the AIG bonuses will be addressed one way or another.