Dodd's Dumb Move

As chairman of the Senate Banking Committee, Chris Dodd was more interested in mounting a hopelessly far-fetched presidential campaign than in drafting the type of legislation and doing the sort of vigorous oversight that might have prevented or at least softened the economic meltdown, particularly in the banking and housing sectors that Dodd had jurisdiction over.

Now comes word that Dodd drafted legislation to cap bonus payments to firms that received bailout money, only to scrap the provision from the economic stimulus bill after the Obama Administration objected. The language was rewritten at the final hour, when no one had a chance to read the bill or even knew it had occurred. So much for changing the culture of Washington.

"We are outraged to learn that Sen. Dodd, at the behest of the Obama administration, inserted a last-minute loophole into the American Recovery and Reinvestment Act that allowed AIG employees to receive exorbitant bonuses at the American taxpayers' expense, and the vast majority of elected officials, not to mention the American public, missed the amendment because they only had 13 hours to read the bill!" the Sunlight Foundation commented today.

Don't blame me, Dodd says, I was just doing what Obama wanted! The Treasury Department wanted the change, so Dodd's staff complied.

No matter who's the ultimate culprit, both Dodd and the Obama team--particularly embattled Treasury Secretary Tim Geithner--deserve blame on this one. If Dodd truly believed the bonuses should've been capped, he could've fought for his convictions and used his perch as a powerful committee chair as leverage. Dodd's actions give those Republicans who've suddenly become ardent of the little guy powerful ammunition, which they're currently exploiting with typical bombast (and hypocrisy). The latest polling shows Dodd tied with a possible GOP contender--former Congressman Rob Simmons--in 2010, not a good place for a longtime incumbent to be.

Meanwhile, Geithner owes us an explanation for why he and his staff objected to capping bonuses for the likes of AIG in the first place. The Treasury Secretary is already on the hot seat--and for good reason. At a time when populist rage is cascading through America, Geithner is playing the role of Wall Street's top defender. He hasn't communicated effectively with the American people, nor given us a sense that he knows how to navigate his way out of this crisis. If Geithner is so "uniquely qualified" to lead us out of troubled waters, why has he seemed so MIA in recent days?

Comments (26)

1. Dodd's Dumb Move posted by Ari Berman on 03/19/2009 @ 2:37pm

   yup

   Posted by julien38 at 03/19/2009 @ 2:46pm

2. Why indeed.

   There's a Pandora's Box the Obama govt will go to very great lengths not to have opened.

   Geithner needs to spend more time with his family & see to some health issues ... immediately.

   Posted by sloper at 03/19/2009 @ 2:53pm

3. "No matter who's the ultimate culprit, both Dodd and the Obama team--particularly embattled Treasury Secretary Tim Geithner--deserve blame on this one."

   Yep, Obamnation and the Demoncrats!

   Just waiting for the usual moronic koolaide drinkin myopic leftists to drone in blaming Bush and the republicans like they have been so busy posting in response for the last few days!

   Posted by comancheamerican at 03/19/2009 @ 2:55pm

4. Geithner needs to spend more time with his family & see to some health issues ... immediately.

   Posted by sloper at 03/19/2009 @ 2:53pm

   Geithner should be looking for a new job, because he sucks at the one he has now!

   Posted by Wolfgang1 at 03/19/2009 @ 3:00pm

5. Not so fast...

   Imagine a scenario, if you've got a moment... because everyone who's gotten close enough to this car accident has come away with white faces and a nervous but favorable view towards the bonuses...

   The 'specialists' if you will... these professionals who have leveraged our country and most of the world against itself for a bottomline profit... in a game that turned into a 'feeding frenzy' for economic survival... has perhaps become a ponzi-esque structure that has to be dismantled with educated care and 'insider' knowhow... like a ticking bomb has to be deactivated by a crew of demolitions experts... or the system implodes on itself.

   Right NOW!

   In other words... very few people have the 'hands on' experience with these specific problems... and though they may have been partly or wholly responsible for tanking the worldwide economy... it is entirely possible that paying these people to 'deactivate' these economic time bombs is both cost effective and smart.

   Get'r done... and get the heck out of our financial system!

   We may have to shut down the "bubble factory"... and then they, like the rest of us, can take up a new line of work...;^)

   Posted by ttr at 03/19/2009 @ 3:14pm

6. Geithner = Rumsfield.

   My not quite so cynical spin, is Geithner is the price Obama had to pay to become president. As such, Geitherner, is "their" man ... in the administration.

   And if you listen to him, he has as much as said so. There is no ambiguity in his position as he was to thick, to add any ...

   Of certain things said and of certain, things done, Geithner, is the discontinuity.

   Posted by V at 03/19/2009 @ 3:32pm

7. "Geithner is the price Obama had to pay to become president."

   Yep.

   A deal's a deal.

   Posted by sloper at 03/19/2009 @ 3:59pm

8. My question is why isn't anybody even looking at the Fed? They supposedly knew about these bonuses in December, but didn't tell Geithner until last Tuesday, just a few days before they had to go out. They basically blindsided the administration.

   If we were six months to a year into the administration, I'd be asking why they didn't know.. But considering they are just barely two months into it, and they still have positions to fill, there is still going to be gaps in the vast amounts of information they have to assimilate and deal with.

   If we can't deal with every piece not falling neatly and perfectly into place with every little issue, it's going to wind up derailing any chance of fixing this economy (and dealing with issues that MUST be done in the next 4 years, like health care reform). And if that happens, this country is finished as a world power.

   In this instance, it's an issue of hindsight. When they added that language, they were thinking about heading off possible expensive and time consuming lawsuits. They didn't see the AIG bonuses coming down the pike.

   Posted by Urieldagda at 03/19/2009 @ 4:01pm

9. posted by ARI BERMAN on 03/19/2009 @ 2:37pm

   Timothy Geithner made him do it. Which means Barack Obama made him do it.

   Posted by syfriendly at 03/19/2009 @ 4:24pm

10. President Obama needs to fire Secretary Geithner, and then not replace him with yet another corporate raider from Summers & Rubin, Inc.

    Posted by syfriendly at 03/19/2009 @ 4:25pm

11. Or maybe because he didn't like the idea of making AIG either break contractual obligations or firebomb the entire industry by going bankrupt? Could that be it?

    BTW, many of the people getting bonuses aren't the ones who actually caused this (see Washington Post editorial from today).

    Posted by Thrawn at 03/19/2009 @ 4:27pm

12. Posted by snowball666 at 03/19/2009 @ 2:59pm | ignore this person | warn this person

    dodd's pissed his buddy, biden, got the veep slot and all he got was this stupid t-shirt.

    lol...

    but i'm sure he'll vote to tax the loophole at 90%...

    ah, the power of good government! such a breath of fresh air!!!!

    hail satan!!!

    Posted by dexter666 at 03/19/2009 @ 4:29pm

13. BERMAN: "The language was rewritten at the final hour, when no one had a chance to read the bill or even knew it had occurred.....Don't blame me, Dodd says, I was just doing what Obama wanted! The Treasury Department wanted the change, so Dodd's staff complied."

    No one read or knew? Then why contradict yourself? Seems to me, no less than DOZENS of people knew of this change between the treasury, Obama's Team of Fools and Sen. Dodd's own cell.

    Where was a good patriotic source to leak this to the NYT before the vote?

    Posted by Happy at 03/19/2009 @ 4:29pm

14. Posted by dexter666 at 03/19/2009 @ 4:29pm | ignore this person | warn this person

    oh, YOU again...

    Posted by ibbleblibble at 03/19/2009 @ 4:30pm

15. BTW, many of the people getting bonuses aren't the ones who actually caused this (see Washington Post editorial from today).

    Posted by Thrawn at 03/19/2009 @ 4:27pm

    Weren't Republican's vehemently opposing the bonus caps? Maybe Obama took it out because he knew it would make it harder to get through Congress. Just a possibility. He could have been just as complicit. But I seem to remember Republican's kicking up a funk when the heard about the Democrat's taking out the bonuses.

    "Or maybe because he didn't like the idea of making AIG either break contractual obligations or firebomb the entire industry by going bankrupt? Could that be it?"

    This one is questionable. If the company got taken over by the government then the companies contracts SHOULD be renegotiated.

    Posted by Cccomfo1 at 03/19/2009 @ 4:41pm

16. Geithner is the price Obama had to pay to become president."

    whattabunchofcrap.

    Obama became pres because of the voters, who preferred him over the old old soldier. most of the electorate had no idea who Geithner was or is.

    Posted by emile duBois at 03/19/2009 @ 4:54pm

17. most of the electorate had no idea who Geithner was or is.

    Posted by emile duBois at 03/19/2009 @ 4:54pm | ignore this person | warn this person

    i didn't. maybe read his name in passing, but...

    what a task of hercules the guy has. let the ideologues and nervous lapdogs of left and right yip and yap, wring hands, and pontificate.

    hot air and ignorant claptrap for the most part.

    Posted by dexter666 at 03/19/2009 @ 5:01pm

18. Citing earlier reports, Salon's G-Greenwald has been busy exposing the phony pieties of the 2-faced "anti-socialists":

    "President Obama has proposed capping compensation for executives at banks that take taxpayer bailout money at $500,000. Republicans hate the idea, a position puts them uncomfortably on the side of people currently about as popular as child-porn producers and subprime mortgage brokers.

    Senate Minority Whip Jon Kyl (R-AZ) blamed the "tone deaf" bankers for creating the political environment that allows Obama to call for a cap. "Because of their excesses, very bad things begin to happen, like the United States government telling a company what it can pay its employees. That's not a good thing in America," Kyl told the Huffington Post. "What executives have done is troubling, but it's equally troubling to have government telling shareholders how much they can pay the executives," said Sen. Mel Martinez (R-FL).

    Sen. James Inhofe (R-OK) said that he is "one of the chief defenders of Obama on the Republican side" for the president's efforts to reach across the aisle. But, said Inhofe, "as I was listening to him make those statements I thought, is this still America? Do we really tell people how to run [a business], & who to pay and how much to pay?"

    ...The GOP is also concerned that setting compensation limits could put the country on the road to serfdom. "This is just a symptom of what happens when the government intervenes & we start controlling all aspects of the economy. This is just the first piece," said Sen. Jim DeMint (R-SC). "If you accept the fact that the government should be setting pay scales in America, then it's hard not to go after these exorbitant salaries. But I think it's a sad day in America when the government setting pay..."

    Posted by PhilMcCrevice at 03/19/2009 @ 5:05pm

19. Sen. Jim DeMint (R-SC).

    Posted by PhilMcCrevice at 03/19/2009 @ 5:05pm | ignore this person | warn this person

    "dim jemint" as he's known some places around here.

    massively uninspiring "conservative republican" "leader".

    but nice hair...

    Posted by dexter666 at 03/19/2009 @ 5:12pm

20. Let the corporate thieves award their "employees" (confederates) to the max. Then clamp the 90%er on em. Dems will see just desserts accorded & repubs can see another way of "letting them fail". Everybody's happy.

    Posted by Sorelish at 03/19/2009 @ 5:58pm

21. here is the truth:

    "Yet everything is exactly backwards in this controversy. The Obama administration has been trying to blame Dodd for the carve-out that allowed the AIG bonus payments, a carve-out that came into being because Geithner/Summers demanded it and because they opposed the limits Dodd wanted as too onerous. And now, the GOP -- which opposed limits of any kind -- wants to blame the Obama administration and Dodd because the limits weren't stringent enough to stop the AIG bonus payments. And the media is playing along perfectly, having clearly decided that the person who led the way in fighting for absolute compensation limits -- Dodd -- is the real villain responsible for the AIG bonuses."

    Posted by darladoon at 03/19/2009 @ 6:22pm

22. My question is why isn't anybody even looking at the Fed? They supposedly knew about these bonuses in December, but didn't tell Geithner until last Tuesday, just a few days before they had to go out. They basically blindsided the administration.

    Posted by Urieldagda at 03/19/2009 @ 4:01pm

    hmmm,

    greenspan, bernanke........

    i wonder why.

    Posted by frosty zoom at 03/19/2009 @ 8:31pm

23. Posted by comancheamerican at 03/19/2009 @ 2:55pm

    Poor RIO. People on the Left criticize a Democrat (Dodd), even Obama...and he just doesn't know how to handle it!

    LOL

    Posted by Mask at 03/19/2009 @ 8:38pm

24. "the GOP -- which opposed limits of any kind -- wants to blame the Obama administration and Dodd because the limits weren't stringent enough to stop the AIG bonus payments. And the media is playing along perfectly, having clearly decided that the person who led the way in fighting for absolute compensation limits -- Dodd -- is the real villain responsible for the AIG bonuses." Posted by darladoon at 03/19/2009 @ 6:22pm

    By all means, let's blame the GOP. Dems control the White House, the House and the Senate, but it must be the fault of the evil new con blood sucking ticks.

    Change... you can believe in!!

    AIG bought and paid for Dodd with campaign contributions. Money well spent.

    Posted by twillie at 03/19/2009 @ 9:17pm

25. It seems like there are three alternative incentives for AIG executives to fix the mess they made. a. They can do it out of the kindness of their hearts and because it's the right thing to do. b. We can pay them to do it. c. A judge can sentence them to do it.

    Posted by Freewheelin_Franklin at 03/20/2009 @ 02:44am

26. having clearly decided that the person who led the way in fighting for absolute compensation limits -- Dodd -- is the real villain responsible for the AIG bonuses."

    Posted by darladoon at 03/19/2009 @ 6:22pm |

    Hey Darla, whose signature is on the legislation making the stimulus bill the law? Isn't that person ultimately responsible.

    A piece of advice, next time Obama (someone on his staff)should actually read the bill before he sits down to sign it.

    Posted by fram at 03/20/2009 @ 04:51am