ABC "Good Morning America" Interview - Transcript

Interview

ABC "GOOD MORNING AMERICA" INTERVIEW WITH SENATOR RICHARD SHELBY (R-AL); REP. ELIJAH CUMMINGS (D-MD)

SUBJECT: AIG USING BAILOUT FUNDS FOR BONUSES INTERVIEWER: DIANE SAWYER

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MS. SAWYER: Well, with that outrage surging, we're going to turn now to two of the most powerful men on Capitol Hill on the economy, Republican Senator from Alabama Richard Shelby, from the Senate Banking Committee, and from the Joint Economic Committee, Democratic Representative from Maryland, Elijah Cummings.

And we thank you both for being with us this morning. Good morning to you.

SEN. SHELBY: Good morning.

REP. CUMMINGS: It's good to be with you.

MS. SAWYER: Let us start, if we can, before getting to AIG, with what the Fed chairman said last night about the possibility of an end to a recession, this recession, by the end of this year, and the beginning of the recovery by next year.

Let me start with you, Senator Shelby. Sound right?

SEN. SHELBY: It sounds good. I'm hopeful, and I believe there was a lot of hope in what the chairman of the Fed was talking about.

But he predicated that on the banking system coming around, that we straighten it out and so forth, that the recession would end toward the end of this year and the recovery would start after that. It always does.

MS. SAWYER: Let me --

SEN. SHELBY: So we're talking about 2010 at the earliest.

MS. SAWYER: For the full recovery to have taken place.

What about you, Congressman Cummings? Sound as if that's plausible -- by the end of this year, the end of the recession?

REP. CUMMINGS: I think so. And I was very pleased to hear him say that.

But we all have got to work hard to make that happen. Clearly, the public and the investors want to know that, and when Bernanke speaks, the world listens.

And so, hopefully, that will help us continue these -- this upward climb that we're making. And I feel very good about it, and I think it's going to happen.

MS. SAWYER: All right. Let me turn now to AIG, because we heard the Fed chairman say last night he actually slammed down the phone in frustration about AIG. We have heard the White House say they're outraged. Outrage, outrage, outrage. Members of Congress have been complaining.

So the question so many people have, is it possible that the entire U.S. government is powerless to ensure that taxpayer dollars are used in a way taxpayers respect? What about this, Congressman Cummings?

REP. CUMMINGS: I don't buy that. I don't buy that. I've been beating up on AIG since November, and I've constantly told them that we cannot have situations where we reward failure and mediocrity. It just doesn't work.

And here we've got a company which has a $61 billion loss, the largest loss in a quarter of any company ever, and yet and still Mr. Geithner is saying and Mr. Liddy, the head of AIG, is saying that we cannot go back and renegotiate these contracts. It's ridiculous.

And so --

MS. SAWYER: But, Congressman Cummings, could those of you who voted for TARP -- and some of this is TARP money -- could you have put this in the provision when you voted for it, to ensure it didn't happen?

REP. CUMMINGS: It certainly should have been a part of that, and I think the Congress moved a little bit more rapidly than we thought we -- than we should have.

But the fact is that now we have to be very careful that, going forward, we don't allow these things to happen again.

Keep in mind what Mr. Liddy said in his letter to Mr. Geithner was that he can't do anything about the 2008 bonuses, but he also said something very significant.

He said that I may be able to take 30 percent off of the 2009 bonuses. What he's basically saying is there are going to be more bonuses coming. And we've got to stop that, and Geithner can do that.

MS. SAWYER: Well, that's right. And they're talking about contracts.

Senator Shelby, we've seen that the auto workers had to undo the contracts. What about these businessmen, many of whom are making 200 (thousand dollars), 300 (thousand dollars, $400,000 a year?

Should there be a way to ask them to undo those contracts so that they undo the provision about bonuses?

SEN. SHELBY: We ought to explore everything that we can through the government to make sure that this money is not wasted.

$165 million is a lot of money. $170 billion in guarantees of bailout is a heck of a lot of money.

These people are -- brought this on themselves. Now you're rewarding -- you're rewarding -- as the congressman said, you're rewarding failure. A lot of these people should be fired, not awarded bonuses. Think about that.

This is horrible. It's outrageous.

REP. CUMMINGS: And Senator Shelby said something very significant there. Keep in mind, in their filings, AIG recent filings, they said they were giving $57 million to people who were being terminated. I mean, that goes in the opposite direction of retention.

And I really do think the American people are being played for fools by AIG.

MS. SAWYER: Seven executives getting more than $3 million, by the way. And I know, Congressman Cummings, you want them named.

But a quick final question to both of you. What does this mean when AIG comes back for more? Is it a certainty that Congress will now say no, uh-uh. You've broken faith.

Senator Shelby?

SEN. SHELBY: Well, I hope we will say no, but on the other hand, a lot of this has been run through the Fed and the Treasury, and I don't believe they've done a great job there. It's no sterling performance, by a long shot.

We need to get -- conserve this company as far as we can, get rid of it and get out of the business. We own 80 percent of it. If we continue this way, we're going to lose a lot of money.

MS. SAWYER: Congressman Cummings?

REP. CUMMINGS: I have confidence that the Obama administration will address this issue very effectively. I think that they are upset about it, and now we cannot have motion, commotion, emotion and no results.

And so I am confident that when and if they come back that all of this will be straightened out. And I plan to be a part of it.

MS. SAWYER: So they will get more money?

REP. CUMMINGS: I'm sorry?

SEN. SHELBY: I'm afraid they will, but I hope they won't.

MS. SAWYER: Do you think they'll get more money, Congressman Cummings?

REP. CUMMINGS: I think they'll get more money, but I don't think they'll be giving out the kind of bonuses that they're giving out now (in ?) retention payments.

Again, I call on Mr. Geithner and I call on the president to address this issue squarely and make sure that it does not happen again. And I do believe they can -- and the Congress will join in with them. No doubt about it.

MS. SAWYER: All right. Well, we thank you both so much for joining us this morning.

SEN. SHELBY: Thank you, Diane.

MS. SAWYER: We are getting an incredible number of e-mails, number of tweets about all of this. Keep them coming; we are reading those, too.

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