Elijah Cummings has driven a lot of news about the AIG bonus scandal, but he's got tentacles deep in other controversial aspects of the $180 billion bailout. He's currently circulating (and I have obtained) a letter to colleagues, seeking their support for a TARP inspector general investigation into every aspect of the payments AIG made, with government money, to counterparties whose risky investments it had insured.
Goldman Sachs claimed in September that they had no material exposure to AIG; however, after AIG released the counterparty information on March 15, we found out that Goldman Sachs received almost $13 billion in counterparty payments.
The Special Inspector General for the Troubled Assets Relief Program was created to ensure that transparency and accountability stay firmly rooted in the government's efforts to revive and sustain the American economy. This letter proposes that the Special Inspector General examine the nature of the counterparty payments - including the recipients, the process by which they were made whole, and the justification, if any, for that level of payment.
He's asking members of Congress to cosign a letter to the inspector general asking him to conduct a thorough inquiry. We've been all over the counterparties controversy and we'll follow this campaign as far as it goes.
While much of D.C. focuses on today's testimony by the Treasury Secretary and Federal Reserve chairman, Congress is diving into a fierce battle over the budget -- and we know where both the House and Senate officially stand.
The House is adding "reconciliation" language that would shield health care reform from filibusters, but only if the two parties can't reach a deal under normal terms by August. The Senate's budget outline, by contrast, has no filibuster protection.
But why would the House add reconciliation to its budget when the tactic is largely relevant only to Senate procedure? Sen. Judd Gregg (NH), the Budget Committee's senior GOPer, theorized today that Democrats are playing "Hide the Reconciliation Ball." Here's how.
Sen. Arlen Specter (R-PA) just dealt a big blow to the labor movement by announcing publicly that he would support a GOP filibuster of the Employee Free Choice Act (EFCA), unions' No. 1 priority for this year and a subject of intense lobbying on both sides of the aisle.
"My vote on this bill is very difficult for many reasons," Specter said in a Senate floor speech, minutes after the news was broken by the Washington Independent. "It is very hard to disappoint many friends ... who are urging me to vote their way."
The Transportation Security Administration has cleared Senator David Vitter (R-LA) of wrongdoing in his reported airport rage incident.
To be exact, it was determined that Vitter did not pose a security threat. He did open the door to his plane's gate, which he should not have done after it had been shut, but he didn't go further after the alarm went off.
The TSA's statement: "TSA worked with local partners to review the incident and determined the actions of the individual did not pose a security threat. The individual caused a door to alarm but did not proceed into a restricted area."
Check out the new attack ads from Jim Tedisco, the Republican candidate in next Tuesday's special election for Kirsten Gillibrand's old House seat. The first one belongs to that very novel category of attack, practiced by all sides in politics -- the kind that blasts his Democratic opponent Scott Murphy for running attack ads:
Some things should be noted about the citations here, such as the Albany Times Unionsaying a Murphy ad was "unfair." To be exact, the ad was from the DCCC, though the Murphy campaign itself did stand by it. On the other hand, the same newspaper recently eviscerated an ad from Tedisco, as its staff has gone about policing the claims on both sides.
Centrist GOP Sen. Olympia Snowe (ME), whose support the White House is counting on to pass health reform, the budget, and climate change, offered a warning to President Obama today: Clarify your position on taxing bonuses at bailed-out companies, or risk losing more political capital.
"I think the president has an obligation to address this [and to] explain why he doesn't think this is necessary," Snowe told reporters today, referring to Obama's initial embrace of taxing bonuses -- which was followed days later by a pullback from his advisers amid questions about the measure's constitutionality.
Moments ago, Secretary Geithner artfully dodged a question that's on everybody's mind: What happens if his plan fails. Echoing the architects and supporters of the success-bonanza that is the Iraq war, Geithner said that the only thing we need to ensure the plan works is sufficient will.
Earlier in the hearing, Tim Geithner suggested that Goldman Sachs could be one of five institutions helping to manage the public-private partnership program to buy up a bunch of toxic legacy assets from ailing banks.
Goldman has played a central role in this drama. As an institution, it's been extremely close to the Treasury department. And, as Josh noted, it's also about to pay off all of its TARP money (with the help, perhaps, of the other government money it received as an AIG counterparty) which will free it up to return to a status quo of paying enormous bonuses.
It's also, of course, one of the institutions that helped bring the financial system to its knees--it holds many of the toxic assets in question and may be well placed to bid them up and inflate their prices at auction. (How you manage the fund to rescue financial institutions with toxic assets while you yourself hold those same assets has yet to be sussed out by committee members.)
Anyhow, in the event that you're feeling left out and want a piece of the Goldman pie for yourself, you can apply with the government to be a private asset manager here.
As Brian observed earlier, the big story of this morning's testimony from Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke was their request for broad governmental powers to seize non-bank financial institutions -- effectively paving the way for receivership in case another AIG-sized firm heads for collapse. But House Majority Leader Steny Hoyer (D-MD) isn't prepared to hand over those powers to Treasury without getting more questions answered.
At his weekly briefing with reporters, Hoyer was notably cool to the idea of handing Geithner takeover powers without greater congressional oversight: