Thursday, March 19, 2009

Spirited Supporters Cheer Obama During OC Town Hall

President Fields Questions About the Economy, Immigration

COSTA MESA, Calif. – With the ailing California economy and controversy over AIG bonuses as a backdrop, President Barack Obama kicked off a two-day trip to Southern California to rally public support for his economic policies aimed at pulling the country out of the current economic crisis.

Pres. Obama appeared Wednesday at a town hall meeting at the Orange County fairgrounds in Costa Mesa, Calif. He spoke for about 20 minutes then took off his jacket, rolled up his sleeves, and took unscreened questions from the audience for the rest of hour.

Before an audience of more than 1,000 spirited people, Pres. Obama sounded like a candidate again, pointing to the failed financial system and scolding greedy Wall Street bankers. But, he didn’t forget to mention his message of hope.

“You've got one of the highest foreclosure rates in the nation. Budget cuts are threatening the jobs of thousands of teachers across the state,” said Pres. Obama, noting the ongoing state budget crisis, rising unemployment rate, reduced home prices and other financial problems.

“We are not only going to make it through this crisis, we are going to come out on the other side a stronger and more prosperous nation,” said Pres. Obama to cheers.

Pres. Obama took full responsibility for the $165 million in bonuses paid to AIG’s executives shortly after it received $180 billion in a taxpayer-funded federal bailout.

“It's hard to understand that a company that is relying on extraordinary assistance from taxpayers to keep its doors open would be paying anybody lavish bonuses,” he said. “It goes against our most basic sense of what's fair and what's right. It offends our values.”

But, the president said the buck stops with him.

“I'll take responsibility,” he said. “I'm the president. We didn’t draft these contracts. We’ve got a lot on our plate, but it is appropriate when you are in charge to make sure that stuff doesn’t happen like this.”

When asked about immigration reform during the question and answer portion, Pres. Obama told the audience that the border must be secured. He said that it is “intolerable” for a half-million people who depress wages of American workers to cross the border each year, and there should be a crackdown on employers who hire undocumented workers.

But, at the same time, he said the country should bring undocumented immigrants out of the shadows and give them a pathway to citizenship that includes learning English and paying fines.

“It’s not going to be a free ride. It’s not going to be an instant amnesty,” said Pres. Obama, who insisted that unless the entire issue must be tackled all at once it won’t work.

Asked on the issue of organized labor, the president said actions need to be taken to assure that employee wages keep pace with the cost of living, something that did not happen over the last decade.

“All I’m trying to do is restore some balance to our economy, so that middle class families who are working hard can buy a home, go on a vacation once in a while,” Pres. Obama said. “They should be able to save for retirement, send their kids to college. That's not too much to ask for, that's the American dream.”

When a teacher who received a layoff notice questioned him how the federal government's stimulus package will help teachers who are in danger of losing their jobs, Pres. Obama said that the funds are intended to retain teachers. However, he said keeping teachers in their jobs is just one part of the educational equation.

“We’ve got to provide better teacher training. There are teachers who may not know their subject matter as well as they should. They've got to be given more time for professional development,” he said. “We've got to have more flexibility, I believe, in terms of how we reward teachers.”

During Pres. Obama’s first town hall meeting after taking office, enthusiastic supporters repeatedly interrupted him, yelling “We love you” and chanting “O-bam-a.” People young and old crowded the aisles to take pictures of the president.

“I pray him for every day,” said Lillian Pereira, 49, of San Dimas, who emigrated from India about 25 years ago.

Thousands of people had lined up at the fairgrounds Monday night and Tuesday morning, hoping to get some of the limited free tickets for the event. But, many were turned away when tickets ran out. Some camped out Monday night at the fairground to secure tickets.

Quyen Vuong, 33, who works for the county, spent Monday evening waiting in the line in order to get her tickets to see the first black president in U.S. history with her 3-year-old son Matthew.

“I couldn’t let go of this once-in-a-lifetime chance,” Vuong said.

Pres. Obama plans to tour an electric vehicle plant in Pomona, Calif. Thursday, before leading another town hall meeting at the Miguel Contreras Learning Complex near downtown Los Angeles. He’s also scheduled to appear on NBC’s “The Tonight Show," before departing on Thursday evening.

Obama in Trouble

At his bizarre town hall last night, President Barack Obama joked that "Washington is in a tizzy" over AIG and the $165 million in bonuses to be paid to its executives. The New York Times yesterday quoted White House chief of staff Rahm Emanuel complaining that the whole affair was a "distraction." At Tuesday's press briefing, White House press secretary Robert Gibbs could not even provide a rough timeline of the administration's handling of the AIG affair.

Yes, it's true that the bonuses represent less than one percent of the total bailout money that has gone to AIG. And yes, there are legitimate points to be made about retention bonuses in general and (though less persuasive) retention bonuses for these AIG employees. But it has been clear for a while that something -- an event, a comment, a cable news tirade, a speech -- was going to focus the growing public anger over bailouts and government giveaways.

This is it.

And if the White House doesn't understand that, Congressional Democrats certainly do. “I think in general the administration is underestimating the rage and frustration that people are feeling about the shenanigans on Wall Street,” Sen. Bernie Sanders (I-Vt.) told Politico. “I think they need to be more aggressive in standing up to Wall Street and representing the taxpayers.”

Other Democrats are taking shots, too.

Paul Kanjorski, a Pennsylvania Democrat who chairs the relevant subcommittee on the House Financial Services Committee, suggested the administration isn't being honest about its knowledge of the bonuses. He said yesterday: "I'm sick and tired of hearing the administration and the secretary of the Treasury say, 'I just found out about it.' That's not true, and if he did just find out about it on Thursday or Wednesday then he better get to his mail department and to his telephone people because we communicated with the Treasury at least six or seven times."

Chris Dodd, chairman of the Senate Banking Committee, is scrambling mightily to avoid having the entire bonus mess laid at his feet. He blamed Treasury department staffers for inserting language into the stimulus bill that protected the bonuses. Dodd warned about the consequences of further mistakes, telling CNN: “The public confidence in our ability is being adversely affected — not just mildly, but seriously.” Charles Rangel, chairman of the House Ways and Means Committee, complained that the White House isn't offering thoughts on how to recover the bonuses.

Ron Wyden, a Democrat from Oregon, faulted the White House for sending "mixed messages."

Mixed messages, indeed. As his economic team is full meltdown, President Obama is holding campaign-style town halls in California, filling out NCAA brackets on ESPN and doing "The Tonight Show" with Jay Leno.

I had lunch yesterday with Senator Johnny Isakson, from Georgia, who said that his office is seeing an unprecedented level of voter outrage. The only thing close was the outcry over immigration reform, but that came largely from one side of the political spectrum. This is everybody.

Voters are looking for someone to blame. At the town hall last night, Obama seemed to accept responsibility. "I'll take responsibility," he said. "I'm the president." It was enough for some in the media to give him credit for stepping up. But it was phony. The very next sentence out of his mouth: "We didn't draft these contracts." And later he added: "My job is to make sure we fix these messes, even if I don't make them."

But the bonuses are almost entirely a mess of his own making. Dodd says that someone from Treasury inserted the language that would protect the bonuses. And, of course, had Obama not fast-tracked the stimulus bill -- insisting on a vote before it was even possible to read it -- perhaps more members of Congress would have raised questions about that odd provision. With just three exceptions, Republicans voted as a bloc against the stimulus and complained loudly -- remember John Boehner slamming the bill on the floor? -- that they hadn't had time to read it.

And yesterday, AIG CEO Edward Liddy said in congressional testimony that Timothy Geithner had known about the bonus issue for a least a week before the White House said he did. And Liddy further said that Geithner, as head of the New York Federal Reserve when that institution gave AIG its first bailout last fall, participated in AIG board meetings.

President Obama, we are told, still has confidence in Timothy Geithner. He might be the only one.

The furor over the White House's handling of AIG is likely to increase as we learn more. What about the bailout money to AIG that has been regifted to counterparties overseas? Is it possible that U.S. taxpayers will be, in effect, paying the bonuses of European bank executives? How would that go over with Johnny Isakson's constituents? Or Chris Dodd's?

AIG means big trouble for Obama's big agenda. Does he understand that?

Charli Rose: A conversation with Condoleezza Rice, Former U.S. Secretary of State


A conversation with Condoleezza Rice, Former U.S. Secretary of State

Dwyane Wade in NBA’s “Amazing” playoff ads

Heat guard Dwyane Wade didn’t play Wednesday night against the Boston Celtics, because of a sore hip, but he’ll debut tonight in the NBA’s new playoff ads in the latest installment of the league’s “Where Amazing Happens” campaign.

Created by Goody Silverstein & Partners and NBA Entertainment, the series of ads ask: “Where Will Amazing Happen This Year?” and feature a number of players in remarkable moments in stark black and white footage. League broadcasters, ABC, ESPN and TNT, are all running the ads that began airing Sunday with ones featuring LeBron James and Joe Johnson.

Spots featuring Wade, James, Johnson, Paul Pierce, Manu Ginobili and other current players will run by the first round of the playoffs. Ads starring former stars, including Michael Jordan, Larry Bird and Magic Johnson, will air during the conference finals and Finals.

Check out Wade’s spot here:

Obama makes NCAA picks

And the winner of the 2009 NCAA college basketball tournament is...North Carolina. So says the first fan President Obama, who made his predictions on Wednesday.

The White House admitted that the president had "played it safe for the most part, picking Louisville (1 seed), Memphis (2), Pittsburgh (1), and North Carolina (1) as his Final Four to meet in Detroit."

"After some deliberation, the First Hoops Fan is calling the Tar Heels as this year's national champs," the White House said in a statement on its web site.

Timothy Geithner: Dead Secretary Walking

A few weeks ago on OTB Radio, Dave Schuler predicted that Timothy Geithner would be out as Treasury Secretary by the end of the year. At the rate he’s going, he might not last to summer.

It’s bad enough his every public appearance causes the Dow to plummet. Now, he’s been openly contradicted by his boss on the AIG creating what NYT correspondent Jackie Calmes has dubbed “perhaps the worst week in a string of bad weeks for the Treasury secretary.”

Mr. Geithner’s once-heralded credentials with Wall Street were already marred by false starts in revamping the Bush administration’s bank rescue program, even as his perceived closeness to financiers — he is the former president of the Federal Reserve Bank of New York — and unease with populist politics left Main Street skeptical.

On Wednesday, a junior Republican in Congress and some traders on Wall Street went so far as to call for him to quit or be fired. The Republican leader of the House, Representative John A. Boehner of Ohio, told a conservative talk-radio host that the secretary is “on thin ice.”

But Mr. Geithner’s boss, the president, interjected a vote of “complete confidence.”

Which is Washington speak for “I haven’t fired him yet.”

And, it turns out, Treasury knew about the AIG bonuses days earlier than we’d been led to believe (albeit not nearly as long as the Fed knew.)

Already, Politico has a “Can Geithner Bounce Back?” story.

If Geithner is to survive, Democrats, analysts and even experts in crisis public relations say the Obama White House must find some way to improve the public image of a man who is becoming closely identified in the public mind with the ugly side of the Wall Street bailouts, including the controversy over AIG’s use of taxpayer money to pay $165 million in bonuses to top executives.

Put it this way: Obama’s made clear he’s not getting rid of Geithner. Now he needs a game plan for an urgent rehabilitation — which imagemeisters say will likely mean throwing Geithner a life raft by keeping him out of the limelight, giving him a more aggressive policy stance to sell and even filling out his depleted ranks at Treasury.

The problem is that there’s nothing in Obama’s short history in public life to indicate that he’s willing to spend that much energy — indeed, any energy at all — to prop up an associate who’s creating a distraction. Jeremiah Wright — gone. Samantha Power — gone. (That one happened so fast it didn’t merit a second post. She is, to be fair, quietly back.) Jim Johnson — gone. Bill Richardson — gone. Nancy Killefer — gone. Tom Daschle — gone. Rodgin Cohen, Chas Freeman, and Annette Nazareth — gone.

Indeed, the only notably exception was Geithner and the flap over his failure to pay taxes. But that’s not a storm he had to weather long and it was obvious that Geithner would nonetheless be easily confirmed under the circumstances. If Geithner continues to be an obstacle to Obama’s agenda, he’ll soon be — gone.

Senator Christopher Dodd Admits Responsibility For Inserting Language Protecting Bonuses

Yesterday, Senate Banking committee Chairman Christopher Dodd took responsibility for inserting language into the federal stimulus bill that protected bonuses like the controversial AIG bonuses. A Treasury official has acknowledged that the Obama Administration pushed for the language. On Tuesday, Dodd denied have any role in inserting the language.


I have been criticized (e.g., here and here) for referring on Countdown in this segment to the amendment protecting bonuses and saying “And I believe it was Dodd who inserted it.” While Treasury may have suggested it and pushed it, it was Dodd who agreed to insert it. Nevertheless, Dodd has stressed that it was the Obama administration that pressured him to add the amendment, which he did not want.

Now, Dodd has come out and acknowledged that indeed he was the member who put it into the bill.

This was a change from the day before when Dodd denied any role in adding the language. The record now also contradicts the earlier statements of the White House, which expressed no knowledge of the bonuses and outrage over the very notion of using stimulus funds in this way.

The new spin from members is that they had no choice but to protect past bonuses. That is not true in my view. I believe that language could have been crafted to keep these funds from being used as general revenue in this fashion or for the purposes of bonuses. Members simply did not want to spend sufficient time to draft the law properly and wanted to rush to get out hundreds of billions of dollars. Now, these same members who expressed concern over litigation are attempting to do something far more controversial — imposing a retroactive confiscatory tax.

North Korea: A glimpse inside a secret state

Two US journalists were detained by the North Koreans on Tuesday while reporting from the China-North Korea border. The BBC's Michael Bristow was also on the border on Tuesday. Here he reports on what he found.

The border between China and North Korea, which stretches for nearly 1,500km (900 miles), is heavily guarded by soldiers from both countries.

Two rivers, the Yalu and the Tumen, act as the border along much of its length. But wire fences have also been erected, sometimes on both sides.

The border seems to be more heavily guarded on the North Korean side. There are military points every few kilometres in some places.

Foreigners are not usually welcome in North Korea so it is difficult to get information about what is going on inside the country.

But it is possible to hire a boat and travel along the Yalu River to get a glimpse of ordinary life in the secretive socialist state.

The BBC took a boat along the river just outside the Chinese border city of Dandong, through which much of the cross-border trade passes.

Praise for leader

It is obvious from a brief look at North Korea that the country is very poor.

North Korean farmers working in the fields were using their hands. There were no tractors, not even horses.


North Korea is happy to show off some aspects of its society
There appears to be little mechanisation in this rural area. A cow-pulled cart was being loaded with water from the cool, clear river.

The BBC also spotted a ferry taking passengers from an island in the river to the mainland of North Korea.

It was making slow progress because it was being powered by a large oar pulled from side-to-side by two men standing at the back of the boat.

There was also a commune of about a dozen bungalows on the island.

They looked like the kind of homes you could find on the south coast of England, but there was also something you would not find in the UK - a slogan over a gateway leading into the commune praises North Korea's founder father Kim Il-sung.

The World Food Programme says that nearly nine million North Koreans will need foreign food aid this year.


This rural face is one that North Korea's current leader, Kim Jong-il, does not want the outside world to see.

But in Dandong, North Korea does allow outsiders to get a glimpse of a more pleasing aspect of the country.

It runs several restaurants in the city in which young, pretty North Korean women sing, dance and serve delicious food.

Wearing traditional costumes, the women perform nightly for both Chinese and North Korean guests.

Shopping in Dandong

The relationship between China and North Korea was forged in blood. China sent an army to help the North during the Korean War.

Hundreds of thousands of Chinese soldiers died in the fighting and there is a memorial to their sacrifice in the centre of Dandong.

It is typical communist architecture. There is a tall, square tower surrounded by four sculptures showing courageous soldiers.

But this relationship is also about trade. North Korea relies on China for much of its food, fuel and guns.

Traders who sell to North Koreans have shops in the streets around China's customs post in Dandong.


North Koreans buy all kinds of items in Dandong

One of these traders is Li Hongde, who runs a shop that sells everyday items such as cups, plates and pans.

The cheapest thing he sells is a glass, which costs just 2 yuan (30 US cents, 21 UK pence). The most expensive item is a rice cooker that costs 2,760 yuan ($404, £284).

"Business isn't very good at the moment because it's winter and the political situation isn't very stable," he said.

He said North Koreans prefer buying household items made in South Korea because they are reliable - and marked with Korean characters.

But before taking their purchases home, the North Koreans scrub off any markings that show where they were made.

There is an array of items on sale at other shops in the district, including electric keyboards, bicycles and hammers.

Many items are taken to North Korea via Dandong's Sino-Korean Friendship Bridge, the main crossing point between the two countries.

It stands next to the Broken Bridge, the previous crossing point that was built by the Japanese and destroyed by US bombers in the Korean War.

The Friendship Bridge is able to carry road and rail cargo, but there is not much traffic at the moment.

In the space of an hour, a van, a couple of trucks and a short train crossed over. It does not seem like business is booming.

Kanye charged over airport attack

Rapper Kanye West has been charged with assault, theft and vandalism following an airport fracas with a photographer.

The hip-hop star was arrested at Los Angeles airport days after performing at September's MTV Video Music Awards.

A video shot by the gossip website TMZ appeared to show Mr West, 31, smashing the flash of a photographer's camera while inside the airport terminal.

The rapper, whose road manager was also charged over the event, could face two and a half years in jail if convicted.

The video tape of the 11 September episode appeared to show the road manager Dan Crawley breaking the photographer's camera.

Mr Crawley is accused of two counts of assault, two counts of theft and two counts of vandalism and could face up to five years in prison.

The rapper and his team were waiting to clear security before boarding an early morning flight to Hawaii.

Mr West's lawyer, Blair Berk, had no comment following the charges.

The Grammy award-winning musician and Mr Crawley are set to appear before the judge on 14 April.

New jobless claims fall more than expected to 646K

WASHINGTON (AP) — New jobless claims fell more than expected last week, but continuing claims set a new record for the eighth straight week and few economists expect the labor market to improve anytime soon.

The Labor Department said Thursday that initial requests for unemployment insurance dropped to a seasonally adjusted 646,000 from the previous week's revised figure of 658,000. That was better than analysts' expectations.

But continuing claims jumped 185,000 to a seasonally adjusted 5.47 million, another record-high and more than the roughly 5.33 million that economists expected.

The four-week average of claims rose to 654,750, the highest since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then.

The job market has been hammered as employers, squeezed by reductions in consumer and business spending, cut their work forces. The unemployment rate reached 8.1 percent last month, the highest in more than 25 years. Many economists expect the rate could reach 10 percent by the end of this year.

The Federal Reserve said Wednesday it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and other consumer debt and loosen credit. To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

As a proportion of the work force, the number of Americans on the jobless benefit rolls is the highest since June 1983. The 5.47 million continuing claims also were up substantially from a year ago, when only about 2.85 million people were continuing to receive unemployment checks.

The increase in continuing claims is an indication that many newly laid-off workers are having difficulty finding jobs.

And even that number is deceptively low: an additional 1.5 million people were receiving benefits under an extended unemployment compensation program approved by Congress last year. That tally was as of Feb. 28, the latest data available.

More job losses were announced this week. Caterpillar Inc. Tuesday said it would lay off 2,400 workers as global demand for its mining and construction machines slumps. Mobile device maker Nokia Corp. said it would cut 1,700 jobs worldwide.

On Monday, oil producer Baker Hughes Inc. said it would eliminate 1,500 jobs, bringing its total recent cuts to 3,000. And industrial company United Technologies Corp., which makes Otis elevators and Sikorsky helicopters, said it would cut 2,000 to 3,000 jobs, on top of 11,600 layoffs it announced the last week.

Copyright © 2009 The Associated Press. All rights reserved.

Israel troops admit Gaza abuses

An Israeli military college has printed damning soldiers' accounts of the killing of civilians and vandalism during recent operations in Gaza.

One account tells of a sniper killing a mother and children at close range whom troops had told to leave their home.

Another speaker at the seminar described what he saw as the "cold blooded murder" of a Palestinian woman.

The army has defended its conduct during the Gaza offensive but said it would investigate the testimonies.

The Israeli army has said it will investigate the soldiers' accounts.

The testimonies were published by the military academy at Oranim College. Graduates of the academy, who had served in Gaza, were speaking to new recruits at a seminar.

The climate in general [was that] lives of Palestinians are much, much less important than the lives of our soldiers

Soldier testimony


Analysis: Operation Miscast Lead?
Gaza war crimes probes

"[The testimonies] conveyed an atmosphere in which one feels entitled to use unrestricted force against Palestinians," academy director Dany Zamir told public radio.

Heavy civilian casualties during the three-week operation which ended in the blockaded coastal strip on 18 January provoked an international outcry.

Correspondents say the testimonies, if proved credible, undermine Israel's claims that troops took care to protect non-combatants and accusations that Hamas militants were responsible for putting civilians into harm's way.

'Less important'

The Palestinian woman and two of her children were allegedly shot after they misunderstood instructions about which way to walk having been ordered out of their home by troops.

"The climate in general... I don't know how to describe it.... the lives of Palestinians, let's say, are much, much less important than the lives of our soldiers," an infantry squad leader is quoted saying.


Palestinian civilians paid a heavy price during the three-week Israeli operation
In another cited case, a commander ordered troops to kill an elderly woman walking on a road, even though she was easily identifiable and clearly not a threat.

Testimonies, which were given by combat pilots and infantry soldiers, also included allegations of unnecessary destruction of Palestinian property.

"We would throw everything out of the windows to make room and order. Everything... Refrigerators, plates, furniture. The order was to throw all of the house's contents outside," a soldier said.

One non-commissioned officer related at the seminar that an old woman crossing a main road was shot by soldiers.

"I don't know whether she was suspicious, not suspicious, I don't know her story… I do know that my officer sent people to the roof in order to take her out… It was cold-blooded murder," he said.

The transcript of the session for the college's Yitzhak Rabin pre-military course, which was held last month, appeared in a newsletter published by the academy.

Israeli human rights groups have criticised the military for failing to properly investigate violations of the laws of war in Gaza despite plenty of evidence of possible war crimes.

'Moral army'


The soldiers' testimonies also reportedly told of an unusually high intervention by military and non-military rabbis, who circulated pamphlets describing the war in religious terminology.

"All the articles had one clear message," one soldier said. "We are the people of Israel, we arrived in the country almost by miracle, now we need to fight to uproot the gentiles who interfere with re-conquering the Holy Land."

"Many soldiers' feelings were that this was a war of religion," he added.

Defence Minister Ehud Barak told Israel Radio that the findings would be examined seriously.

"I still say we have the most moral army in the world. Of course there may be exceptions but I have absolutely no doubt this will be inspected on a case-by-case basis," he said.

Medical authorities say more than 1,300 Palestinians were killed during Israel's 22-day operation, including some 440 children, 110 women, and dozens of elderly people.

The stated aim was to curb rocket and mortar fire by militants from Gaza. Thirteen Israelis, including three civilians were killed.

Congress readies punitive taxes on AIG bonuses

US lawmakers readied Thursday to hit AIG fat-cats in the wallet as President Barack Obama's administration battled to defuse a national furor over massive bonuses handed out by the giant insurer.

Lawmakers said the House of Representatives would vote later on a bill to slap a 90-percent surtax on bonuses paid 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 late Wednesday.

Hoyer spoke after a day-long congressional grilling for AIG's government-appointed boss, Edward Liddy, whose call for bonus recipients to repay half the money was derided as too little, too late.

Obama shouldered the blame for the uproar over the "retention bonuses" totaling 165 million dollars, which Liddy said were essential to keep on top staff and traders so as to unwind a high-risk hedge fund operating within AIG.

"Listen, I'll take responsibility. I'm the president," Obama said, sparking cheers and applause at a "town hall" meeting in Costa Mesa, California late Wednesday.

"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.

"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.

AIG was saved from bankruptcy with an 85-billion-dollar government lifeline in September. The bailout has since mushroomed to more than 170 billion dollars, leaving the taxpayer with an 80-percent stake in the company.

The insurance giant was rescued because the US government believed its intricate web of ties with banks worldwide posed an imminent risk of financial collapse not just for the United States but globally.

AIG informed the US Federal Reserve three months ago that it would pay the bonuses on March 15, but the Fed failed to notify Treasury or White House officials for months, The Washington Post reported Thursday.

"I was stunned when I learned how bad this was on Tuesday (March 10)," Geithner told the Post. "I shouldn't have been in that position, but it's my responsibility and I accept that."

Geithner then briefed a senior White House aide, who informed Obama on March 12, the day before they were paid out, the Post reported.

Republicans are scenting blood as Geithner, already under attack for his stop-start initiatives to clean out the US banking industry, is assailed over the AIG saga.

At Wednesday's hearing, Republicans 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."

The embattled AIG chief executive revealed that he was asking executives who received more than 100,000 dollars in bonuses to repay half the amount.

"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.

Liddy, a former CEO of the Allstate insurance company who took over at AIG after the 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 "credit default swaps" and derivative products helped ignite the global financial crisis, is still sitting on 1.6 trillion dollars in shaky investments that need expertise to unwind.

That argument was unacceptable to lawmakers who gave vent to their constituents' fury over the bonuses at a time when millions of Americans are living in dread of losing their jobs, homes and healthcare.