Washington - Fuming US lawmakers readied to hit AIG fat-cats in the wallet as President Barack Obama shouldered the blame for a national furor over giant bonuses handed out by the disgraced insurance titan.
After a day-long congressional grilling for AIG's government-appointed boss, Edward Liddy, Democrats announced late on Wednesday plans to slap a 90% surtax on bonuses like those totaling $165m given to AIG staff.
Lawmakers said the House of Representatives would vote on Thursday on a bill to levy the special tax at companies that, like American International Group, have been rescued at US taxpayer expense.
"I expect to see an overwhelming vote which will be an expression of the people's anger and disgust" at corporate bosses rewarding themselves for failure, House Democratic Majority Leader Steny Hoyer said.
Obama flew out to California bidding to sell his economic revival policies. But for a fourth day running, the AIG bonuses swamped news coverage nationwide and threatened to derail Obama's impending plan to overhaul US banks.
"Listen, I'll take responsibility. I'm the president," Obama said, sparking cheers and applause at a "town hall" meeting in Costa Mesa.
"We didn't draft these contracts. We've got a lot on our plate - but it is appropriate when you're in charge to make sure that stuff doesn't happen like this.
'Much to explain to the American people'
"So we're going to do everything we can to fix it," the president said, after earlier expressing his "complete confidence" in under-fire Treasury Secretary Timothy Geithner.
But in a sign that Republicans smelled blood, Liddy's appearance at a packed hearing of the House subcommittee on capital markets saw opposition claims that Geithner had bungled the AIG controversy.
Republican members demanded full disclosure of Geithner's involvement with AIG in his previous job as head of the New York Federal Reserve, and House Minority Leader John Boehner said the Treasury chief is "on thin ice."
Interviewed by a Nashville-based radio host, he queried: "What did the administration know, when did they know it and what did they do about it?"
Geithner and Federal Reserve chairperson Ben Bernanke are to appear before the House financial services committee on Tuesday on the mess at AIG, which is now controlled 80% by the US taxpayer.
"They have much to explain not only to us, but also to the American people," subcommittee chairman Paul Kanjorski, a Democrat, said at the hearing with Liddy.
The embattled AIG chief executive revealed that he was asking executives who received more than $100 000 in bonuses to repay half the amount.
Arrogance, Incompetence, Greed
"We've heard the American people loudly and clearly these last few days," he said, while adamant that despite the threat of subpoenas, lurid death threats made it essential to keep the names of the 418 bonus recipients private.
Senior House Democrat Barney Frank said the death threats were "despicable" but kept up a vow to extract the names - as did New York state Attorney General Andrew Cuomo, who is crusading against Wall Street malfeasance.
"Rather than take half-measures, AIG should immediately turn over the list, which we have subpoenaed, of who got what and when," he said in a statement.
Liddy, a former CEO of the Allstate insurance company who took over at AIG after a government rescue deal in September, said the financial products unit blamed for the group's giddy fall from grace would be shut within four years.
He said the unit, whose intricate dealings with banks worldwide helped ignite the global financial crisis, is still sitting on $1.6 trillion in shaky investments that need expertise to unwind.
Therefore, he said, the company had to accept "the cold realities of competition" and honour the retention bonuses for senior staff and traders.
That argument was unacceptable to lawmakers who gave vent to their constituents' fury at a time when millions of Americans are living in dread of losing their jobs, homes and healthcare.
Congressman Paul Hodes said AIG now stands for "Arrogance, Incompetence and Greed." His fellow Democrat Gary Ackerman spoke of "a tidal wave of rage" sweeping the recession-hit United States.
- AFP