RENEE MONTAGNE, host:
This is MORNING EDITION from NPR News. I'm Renee Montagne.
STEVE INSKEEP, host:
And I'm Steve Inskeep. Good morning. When President Obama turned up on the Tonight Show last night he took a question that must have been dear to the hearts of his daughters. When he will get a presidential dog?
President BARACK OBAMA: This is Washington. That was a campaign promise.
(Soundbite of audience cheering)
Mr. JAY LENO (Comedian/Talk Show Host): Oh! Wow. Wow.
INSKEEP: The president says the dog will arrive shortly.
Pres. OBAMA: I think I'm going to have a lot of fun with it. You know, they say if you want a friend in Washington, get a dog.
Mr. LENO: Exactly.
(Soundbite of audience cheering)
Mr. LENO: Mr. President, I must say, this has been one of the best nights of my life. Thank you very much, sir. The President of The United States. Be right back with…
MONTAGNE: And the president spoke during a week when his treasury secretary may feel a need of a friend. Timothy Geithner has been a target of criticism in the AIG bonus controversy. Several Republican members of Congress are calling for his resignation. And as NPR John Ydstie reports, even some Democrats are beginning to express concern.
JOHN YDSTIE: Secretary Geithner has had a rough start as the administration's top economic official. First, there were the personal tax issues that held up his appointment. Then he was criticized for unveiling a bank stabilization plan that lacked any details on how to deal with the toxic assets at the heart of the financial crisis. This week, Geithner was ensnared in the AIG bonus mess. Members of Congress are asking when he first knew about the bonuses and why he didn't do more to stop them. Several Republican back-benchers in the House have called for his resignation. House Republican Leader, John Boehner of Ohio, doesn't go quite that far.
Representative JOHN BOEHNER (Republican, Ohio; House Republican Leader): I think the treasury secretary is on thin ice, and the sooner we get answers to the questions we've posed, the better off he might be as well.
YDSTIE: One of the things Republicans are focusing on is a last-minute change to an amendment on executive pay in the stimulus package. The change kept the restrictions on pay from being applied retroactively, meaning they didn't apply to the AIG bonuses. Geithner has acknowledged Treasury officials were involved in discussions that led to that change. On Wednesday, as he prepared to leave for the West Coast, President Obama rose to Geithner's defense.
Pres. OBAMA: I have complete confidence in Tim Geithner, and my entire economic team. Understand, as I said before, Tim Geithner didn't draft these contracts with AIG. There has never been a secretary of the Treasury, except maybe Alexander Hamilton right after the Revolutionary War, who's had to deal with the multiplicity of issues that Secretary Geithner is having to deal with, all at the same time.
YDSTIE: The president went on to say Geithner is making all the right moves on the economy after being dealt a bad hand. But while he may not have written the bonus contracts, as the president said, Geithner played a big role in designing the AIG rescue in his previous job as head of the New York Fed. Robert Reich, who was the secretary of labor during the Clinton administration, says Geithner may be vulnerable, though he doesn't think he is in a huge amount of trouble. But Reich says, he's hearing from Democrats who are expressing concern.
Mr. ROBERT REICH (22nd Labor Secretary, U.S.): I get calls, people saying, you know, who should be Geithner's replacement if he should be replaced? Or don't you think he's really a liability; isn't he screwing up this or screwing up that? I've been through this so many times before as I'm sure you've, you know, Washington thrives on a kind of who's up, who's down gossip.
YDSTIE: Still, Reich says, Geithner is the easiest target in the administration for critics of the AIG bonuses.
Mr. REICH: Because, obviously, if he did not know, as he says he did not know, then why didn't he know? I mean, the government is essentially the owner of AIG and should be running AIG. On the other hand, if he did know, why did he let it slip so long and so far? I think there are good answers to each of these.
YDSTIE: Indeed, Edward Liddy, AIG's CEO, acknowledged before a congressional committee on Tuesday that he had not talked to Geithner about the bonuses until last week. In further defense of Geithner, Reich says the number of huge issues he's juggling makes it understandable that the bonus issue could fall through the cracks. That's especially the case since delays in vetting appointees have kept Geithner very short staffed at the Treasury.
Nevertheless, Reich acknowledges, when a president is forced to express full confidence in a Cabinet secretary, the red flags go up in nation's Capitol.
John Ydstie, NPR News, Washington.
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