AIG Uproar Squanders Obama Capital
Anger over AIG creates more obstacles for president's agenda
By Rob Quinn,  Newser Staff
Posted Mar 17, 2009 4:47 AM CDT
President Barack Obama, followed by Treasury Secretary Timothy Geithner, arrives in the East Room of the White House yesterday to deliver remarks to small business owners and members of Congress.   (AP Photo/Gerald Herbert)
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(Newser) – Mounting outrage over the bonuses paid to AIG execs is threatening to bring Barack Obama's presidential honeymoon to a bitter end, the Washington Post reports. Lawmakers from both parties are demanding answers the administration is struggling to provide, and the uproar is threatening to sap both public and congressional support for the president's ambitious agenda.

The administration has scrambled to do damage control, with Obama yesterday declaring the $165 million in bonuses an "outrage." Officials—after first saying their hands were tied because of existing contracts—announced efforts to claw back the bonuses, but the scandal has already erased the political capital won by earlier steps to clamp down on executive compensation. Fury over the payouts will make it tough for the administration to ask Congress for yet more bailout cash.