Worried about AIG?
What about Congress? By David Lias
Between The Lines I write this after having my office television on for several hours this morning. The white noise in the background is turning increasingly red hot with anger, as everyone from your average Joe on the street, to members of Congress, to President Obama express dismay over American International Group, Inc. (AIG). Mr. Obama and his top aides expressed outrage at reports that American International Group Inc. went ahead with $165 million in bonuses even though the company received more than $170 billion in federal rescue money. Obama directed Treasury Secretary Timothy Geithner to see whether there was any way to retrieve or stop the bonus money – a move designed as much for public relations as for public policy. Members of Congress have also joined the outcry against AIG, and some have gone to extremes. Yesterday Iowa Senator Charles Grassley suggested in a radio interview that AIG executives "come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide." It seems that expressions of anger, not productive, ideas or solutions, are the only thing building so far as officials try to figure out what to do next about the AIG situation. There may be a good reason solutions are in short supply right now. When it comes to money management, the last place to look is Congress. Congress has a long, historical record of consistently spending taxpayers' money – financial crisis or not – as if there is a limitless supply. Approximately a week ago, President Obama signed into law a $410 billion budget bill that contains thousands of wasteful pork-barrel projects known as "earmarks." The president, who campaigned to end this wasteful practice, said he was forced to sign the bill to keep the federal government from grinding to a halt. Organizations such as Citizens Against Government Waste and Taxpayers for Common Sense said Obama should have vetoed a $410 billion bill that includes congressional pet projects known as "earmarks." Our own Congressional delegation isn't immune to this propensity to give their backing to pork projects, according to Citizens Against Government Waste. The organization claims that in 2008, Sen. Tim Johnson backed 100 projects totaling $130.1 million. During the same year, Sen. John Thune gave his support to about half as many projects — 49 — totaling $22.8 million. Rep. Stephanie Herseth, according to Citizens Against Government Waste, helped sponsor 43 pork barrel projects in 2008 totaling $90.1 million. What's "rich" – pardon the pun – is that Congress has been busy today holding AIG's feet to the fire while the representatives and senators have never seen a pay raise they could refuse. According to an article in Time magazine, Congress' automatic pay raises are in little immediate danger of being scrapped for good, even with the economy slumping and millions of Americans unemployed. House Speaker Nancy Pelosi on March 12 would not commit to holding a vote on a bill to do away with the annual cost-of-living increases. She pointed out that Congress recognized the economic crisis by voting this week to skip next year's raise. In so doing, though, lawmakers defeated a Senate measure to abolish the automatic pay hikes and force them into the deep discomfort of casting actual votes to give themselves raises. No one is rushing to defend the current system in a tanking economy that has rendered the annual raise a quaint memory for many outside Washington. Even inside the Beltway, President Barack Obama has frozen pay for about 100 White House workers making six-figure salaries — an acknowledgment that appearances matter to a financially fragile nation. But scrapping Congress' own automatic, cost-of-living raises for good? That's where congressional leaders drew the line last week — and buried it beneath an avalanche of legislative process, blame-passing and rhetoric. Competing proposals on the Senate floor earlier in the week effectively canceled each other out. The nation's founders set up the system to make congressional pay raises inherently difficult for those who would receive them. The Constitution requires Congress to set its own pay and be accountable to voters every few years during elections. Congress has raised its own pay in stand-alone bills more than two dozen times, according to the Congressional Research Service. But in 1989, it passed a law providing for annual cost-of-living adjustments unless Congress votes otherwise. Lawmakers voted to skip their annual pay raises in 2007 and earlier this week voted to forego next year's because of the recession. Their latest pay raise of $4,700 took effect in January and brought congressional salaries to $174,000.