But members of the House Committee on Oversight and Government Reform hammered away at why regulators allowed American International Group to pass on billions of the bailout money to big Wall Street and international banks that were business partners.
“In effect, the taxpayers were propping up the hollow shells of AIG by stuffing it with money. And the rest of Wall Street came by and looted the corpse,’’ Edolphus Towns, a New York Democrat and the committee chairman, told Geithner.
Geithner received little cover from committee Democrats on the day President Obama was to give a State of the Union message intended to assure Americans he shares their economic priorities.
Representative Marcy Kaptur, Democrat of Ohio, suggested Geithner was more beholden to banking interests than to taxpayers at the New York Fed and cut him off abruptly when he tried to deny it.
Kaptur later called Geithner’s performance weak and said it showed that “he shouldn’t have been appointed in the first place.’’
She said in an interview that he should go, “but removing him would be an empty change without eliminating the revolving door between Washington and Wall Street.’’
Both Geithner and Ben Bernanke, Federal Reserve chairman, have found themselves on the defensive, both targets of political discontent and rising voter anger over bailouts and bonuses.
Bernanke was scrambling for support for confirmation for a second term.
And Geithner faced speculation over whether his influence was fading after Obama reset his economic priorities to go with a far more aggressive attack on Wall Street and large banks that had been recommended by Paul Volcker, former Fed chairman.
Geithner remained calm against the withering criticism.
“Deciding to support AIG was one of the most difficult choices I have ever been involved in, in over 20 years of public service. The steps that were taken were motivated solely by what we believed to be in the public interest,’’ Geithner said.
He also repeated an insistence that he played no direct role in AIG deals to pay back banks that were business partners or in withholding information about them from the public.
