December 10th, 2009
04:45 PM ET
7 months ago

Geithner defends AIG bailout

Treasury Secretary Geithner defended the federal government's bailout of AIG on Capitol Hill Thursday.
Treasury Secretary Geithner defended the federal government's bailout of AIG on Capitol Hill Thursday.

WASHINGTON (CNNMoney.com) – Treasury Secretary Tim Geithner said on Thursday that he had no choice but to pay top dollar to business partners of troubled insurer AIG to avert a deeper financial panic last year.

Geithner defended regulators' actions to prop up American International Group (AIG, Fortune 500) with $62.1 billion that was essentially funneled to 16 banks that were counterparties to AIG insurance contracts.

"I don't understand why this is so complicated," Geithner told the Congressional Oversight Panel at a hearing on Capitol Hill. "You either prevent default, because default would be cataclysmic – or you don't. If you selectively default on any, the thing will come crashing down."

Full story


Filed under: AIG • TARP • Timothy Geithner
soundoff (37 Responses)
  1. Dean

    Wonder if Geithner ever paid his taxes.

    December 10, 2009 05:45 pm at 5:45 pm |
  2. Aspen Professor

    Shhhhh! Don't wake up the Republicans. They have offered NO alternatives, have lied through their teeth at every opportunity, and their hypocrisy shows in startling contrast to the Democrats doing their best to turn around our disaster of a Health Care System.

    Lies at every opportunity seems to be the new Republican way.

    December 10, 2009 05:59 pm at 5:59 pm |
  3. Enough

    Turbo Tax cheat Geithner..................I can't respect a word this tax evading weasel has to say. How can this man tell us to pay our taxes when he doesn't pay his. Another fine appointee by the Obama administration.

    December 10, 2009 06:00 pm at 6:00 pm |
  4. Bruce

    Not a single soul can say that by not bailing out AIG this nation's economy would be better. The fact is that we bailed out this giant and avoided an economic depression.

    December 10, 2009 06:00 pm at 6:00 pm |
  5. Arvidel in IL

    Geithner has failed us repeatedly. He should be ousted immediately.

    December 10, 2009 06:14 pm at 6:14 pm |
  6. S M R

    I agree that it was important at the time, but Regulation was left out so it was a waste of Taxpayers money. The very people that made bad Business decisions rewarded themselves with huge bonuses. Bush just looked the other way. SO SAD!!!

    December 10, 2009 06:17 pm at 6:17 pm |
  7. J.P.

    ...so says (Turbo-) Tax Cheat Tim Geithner.

    I wouldn't take this man's advice in buying a used car, let alone advising on bailouts.

    One and Done.
    Four and the Door.
    A single term and nothing more.

    December 10, 2009 06:21 pm at 6:21 pm |
  8. Fitz In Texas

    Defend it all you want, we're not buying it. And the only thing I find "complicated" is the fact you didn't pay your taxes and I, among millions, are paying the salary of a tax cheat.

    December 10, 2009 06:25 pm at 6:25 pm |
  9. Fooled Again

    Geithner needs to be arrested for theft by swindle. He was in charge of the oversight(which he failed to do), then he gives our taxpayer money to his wallstreet buddies.

    We need to audit the Federal reserve to see just how crooked this whole ponzi scheme is.

    December 10, 2009 06:30 pm at 6:30 pm |
  10. C. Farrell, Houston, Tx

    AIG is the insurer of big insurance companies that Republicans support and the Republicans certainly shouldn't have one complaint.

    December 10, 2009 06:32 pm at 6:32 pm |
  11. victim of the false prophet OBAMA

    this guy belongs in jail...PERIOD......

    December 10, 2009 06:34 pm at 6:34 pm |
  12. Matt from PA

    The federal government now owns 80% of AIG. That is socialism, you can't deny it!!! It rewards failure.

    December 10, 2009 06:40 pm at 6:40 pm |
  13. New Age Independent

    Geithner had no choice but to pay off AIG? One has to ask why? What exactly is the connection with AIG and the Democrats, and exactly why are they compelled to spend OUR money to a failing company that is as irresponsible with money as the Democrats themselves.

    December 10, 2009 06:42 pm at 6:42 pm |
  14. Dodie ~ CA

    I wonder what Treasury Secretary Tim Geithner's personal financial connection is with AIG?

    December 10, 2009 06:47 pm at 6:47 pm |
  15. The United States of Debt

    Let's let the AIG executives decide their own bonuses, dare them to dream big, and then give them whatever they want, courtesy of the American taxpayer.

    December 10, 2009 06:51 pm at 6:51 pm |
  16. Mark

    You know im a conservative and I don't blame this guy. There wasn't a lot of time to save our financial system from the housing bust and having the perfect plan wasn't going to happen.

    Now Obama's continued non stop spending that's another story.

    December 10, 2009 06:57 pm at 6:57 pm |
  17. mjm

    The only reason AIG was in that position was because of Freddie and Fannie. The government had to bail them out because they caused it in the first place.

    December 10, 2009 06:57 pm at 6:57 pm |
  18. Gerry NH

    Geithner has no clue about how to do his job all he knows is spend more money and put the government and America further in debt.

    December 10, 2009 07:00 pm at 7:00 pm |
  19. ib

    This guy is a poor excuse for a treasure secretary. But what do you expect from someone who couldn't figure his own tax bill or maybe he could and just thought he could get by with it. Come to think of it he did he got appointed to a cabinet post. Pathetic.

    December 10, 2009 07:15 pm at 7:15 pm |
  20. dave

    If B of A can pay back their loans, why can't AIG? Oh yeah, they gave it to all the geniuses in bonus money so they could retain them. Brilliant Gaithner, now go home, you're fired. What a joke. And you think the government can run health care? Certainly not.

    December 10, 2009 07:17 pm at 7:17 pm |
  21. Hillbillicus

    If anyone wants to really know what is going on here check out Matt Taibbi (hardly a coservative writer) in Rolling Stone (hardly a conservative magazine). Once your eyes have been opened to Geitner and his cronies and what happened to your tax dollars (those of us that work and pay taxes anyway) you will totally understand how this administration views capitalism. Check it out for true enlightenment.

    December 10, 2009 07:20 pm at 7:20 pm |
  22. Ken in NC

    Geithner said ""I don't understand why this is so complicated." If he doesn't understand it then he needs to find another line of work. It's complicated because crooks made it complicated. The entire gang needs to tarred and feathered and run out of town and given at no charge to Iran.

    December 10, 2009 07:22 pm at 7:22 pm |
  23. Palermo

    With total default looming, it seems as though the Treasury would have had the upper hand at the bargaining table with AIG counterparties to negotiate percentage-on-he dollar settlements. Most of the banks and counterparties were not US corporations, so the real taxpayer protection went overseas. AIG has still never been held accountable for the risks they took in the financial marketplace...with their investors, stockholders, or the government, and they are still paying out huge contractual bonuses even though they are only solvent because of a taxpayer bailout.

    December 10, 2009 07:28 pm at 7:28 pm |
  24. m smith

    Probably because they are stupid repos and don't get it.

    December 10, 2009 07:41 pm at 7:41 pm |
  25. Jokes aside

    Secretary Tim Geithner is a smart guy! He knows what he is talking about!! politicians just bark no thinking!!. Sir, keep on doing what you are doing and within acouple of months the economy will start booming again!!!

    December 10, 2009 07:42 pm at 7:42 pm |
1 2