GOP senators blast administration on AIG bonuses

WASHINGTON -- Top Senate Republicans on Thursday stepped up criticism of the Obama administration's handling of bonuses paid to executives at bailed-out insurance giant AIG.

Their comments came as the House prepares to vote at 2 p.m. on a bill pushed by congressional Democrats that would impose a new tax on the $165 million paid to AIG executives.

Arizona Sen. John Kyl, the No. 2 Republican in the Senate, said Obama appeared "distracted," noting the president's scheduled appearance tonight on NBC's Tonight Show With Jay Leno.

"It does not appear that the administration has figured out… how to manage the taxpayer's money," Kyl added.

Sen. Lamar Alexander, R-Tenn., said the "AIG bonuses make the president subject to the charge that he's living above the store, but he's not minding" it.

Senate Republican leader Mitch McConnell, in remarks on the Senate floor, was less combative. "The President said last night that he wants to make sure we don't find ourselves in this situation again," McConnell said. "I agree."

President Obama, who took office just under two months ago, told reporters Wednesday that his administration was not responsible for a lack of federal supervision of AIG that preceded the company's demise.

But Obama added, "The buck stops with me."

Sen. Harry Reid, D-Nev., the Senate Majority Leader, says he doesn't think it will be much of a problem to resolve the differences between the House and Senate. They are hoping to move on the Senate bill next week.

"I would hope they would allow us to proceed on this," Reid said of Republicans. "They are stuck in reverse. They don't want us to do anything."

Democrats also have drawn fire for preserving the bonuses in the recently passed stimulus bill. Sen. Chris Dodd, D-Conn., has acknowledged adding the language protecting the bonuses at the suggestion of a Treasury Department office.

"We have to know what happened," said Sen. John Cornyn, R-Texas.

Under the House proposal, a 90% tax would apply to bonuses given to employees who earn more than $250,000 at any firm that received more than $5 billion in bailout money.