Sen. McCain on AIG Circus

Published March 18, 2009

| FoxNews.com

This is a rush transcript from "Hannity," March 17, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The White House and Democrats are outraged about the AIG bonuses tonight, but do they have a reason to be? Now increasingly it appears that they are to blame for this latest boondoggle, and that is our headline this Tuesday night, day number 57 of the most liberal agenda in American history: "Caught Red Handed."

Now first we learned today that Connecticut Democratic senator Chris Dodd slipped an amendment into the stimulus package last month that protected bonuses agreed to before February 11, 2009, meaning the AIG bonuses, and Senator Dodd tells FOX News this evening that he wasn't responsible for, well, the February deadline, but come on, isn't he still a friend of Angelo and got that special mortgage deal?

Well, now Dodd is trying to cover his tracks by proposing a new tax on the bonuses paid by AIG, an attempt to undo his own damage. Of course, it is worth mentioning that Dodd is also the largest recipient of AIG political contributions with more than $100,000 in the 2008 cycle.

Meanwhile, the White House was also caught red handed today as the public learned that the AIG bonuses were not new. They first came to the attention of the Bush administration last September, and apparently Treasury secretary Tim Geithner, well, he knew about them last week.

The president had promised to address the issue of executive compensation, but administration officials still appeared on the Sunday shows last weekend and feigned outrage pretending that they just learned about this entire debacle.

(BEGIN VIDEO CLIP)

CHRISTINA ROMER, CHAIRWOMAN, COUNCIL OF ECONOMIC ADVISERS: We're the first people to be angry, so absolutely, Secretary Geithner has been furious.

LAWRENCE SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: George, look, there are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous. What that company did, the way it was not regulated, the way no one was watching, what's proved necessary. It is outrageous.

(END VIDEO CLIP)

HANNITY: And White House press secretary Robert Gibbs got hammered by the press corps about this earlier today at his daily spin session.

(BEGIN VIDEO CLIP)

JAKE TAPPER, ABC NEWS: Secretary Geithner learned about the bonuses, I suppose, Wednesday of last week or around then.

Can you walk us through what members of your administration learned about the bonuses and when they learned about them?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't have a particular tick tock in front of me.

TAPPER: Clearly somebody dropped the ball. Somebody didn't tell Secretary Geithner about this or Secretary...

GIBBS: Well, let's also understand that these are contracts that existed, as I understand it, and I prefaced this yesterday by not surprisingly telling you I'm not a contracts lawyer.

TAPPER: Why didn't you know about it until last week?

GIBBS: Well, I — again, I will check on some exact tick tock.

UNIDENTIFIED REPORTER: You said you haven't talked to the president yet about there he learned about these bonuses. Could I just put in a request that you ask him when he learned?

GIBBS: I will write that down.

CHUCK TODD, NBC NEWS: Why haven't you asked the president when he learned about this?

GIBBS: There are a lot of questions I haven't asked the president.

(END VIDEO CLIP)

HANNITY: All right. And joining — I don't know whether to laugh or cry. Joining us tonight is a man who has been against the AIG bailout since the very begin, Senator John McCain.

Video: Watch Sean's interview

Senator, thanks for being on with us.

SEN. JOHN MCCAIN (R-AZ): Thanks, Sean. Thanks for having me on.

HANNITY: Senator, 73 AIG employees as a result of these bonuses that we pay for, not — forget about we. The American taxpayers paid for. They became millionaires as a result of these bonuses. In one particular case a so-called retention bonus of $4.5 million for a guy that didn't even stay on the job.

And The Washington Post is pointing out today that we knew about all of this last year. So why are they feigning outrage?

MCCAIN: I don't know, but I will say, again, if we hadn't bailed them out, then they would have gone bankrupt, and all of this stuff would have been the subject of the courts and reorganization. Instead we poured hundreds and how many billions dollars into this failing institution, and now we have everybody scrambling around.

It is incredible that the treasury secretary knew about these bonuses and didn't tell anybody or certainly Congress was not informed.

HANNITY: Well, and I think this is a very major point here. Now I pointed out — I found The New York Times article — we discussed this a little bit last night, November of 2008, Timothy Geithner, he was the guy they claimed — The New York Times, hardly the vast right wing conspiracy — they claim he was the guy that put all of this together, and I think it raises a question.

We'll be debating it in our next segment. Should Timothy Geithner be fired?

MCCAIN: I think it's too early to because we need to find out all the facts, but the fact — reality is when we decided to bail them out, then we decided to invest. It was a tar baby. What's this, the fourth package that they've gotten of tens of billions of dollars? Again, I forgot, you know, you can give the number later on. I think it's $120 billion. It's unbelievable.

(CROSSTALK)

HANNITY: $165.

MCCAIN: $165, and there was a provision, I am told, that was attempted by senators Widen and Snowe to limit executive compensation, and that was killed. So — but — look, it also means when you do these massive bills that nobody reads for weeks and even months, then you're going to get this, all kinds of this stuff going on, including protectionism and starting a trade war with Mexico which we did on the spending bill.

HANNITY: Yes, and Senator, I don't know whether to laugh or cry as we've lost $11 trillion of wealth in this country, and you're telling us as a prominent senator we have bills that nobody reads them. It's mind numbing. It's like trying to go to school. I find it mind numbing, Senator.

MCCAIN: I was on the floor, it was — I think 800-page package on one side and a thousand — 1100-page package, all the bill that we were voting on and passing which nobody read. We'll be finding out stuff that was in it, as I mentioned to you, for months. It was full of — not only pork, but policy changes.

This trade war we're starting with Mexico, by America in the last one, protectionism is on the rise and our friends and allies around the world won't like it.

HANNITY: You know, if I could think of one positive outcome that may be a result of this as the American people focus their attention on it is maybe this will end bailout mania. One of the things that AIG did with the money, and maybe you can explain how this is possible, put $20 billion of our taxpayer dollars went to bail out European banks.

Senator, did you see that in The Wall Street Journal?

MCCAIN: I saw that, European banks were bailed out with American taxpayer dollars. That's the real outrage here. Frankly, in many respects, it's far more of an outrage than the $100 some million in executive compensation. $20 billion to foreign banks.

HANNITY: Yes. Let me ask you.

MCCAIN: You can't make it up.

HANNITY: In retrospect, you know, and I would argue this was probably just bad luck, bad timing for you in your presidential campaign, and you suspended the campaign, and you were criticized for it, you did support the original TARP plan. We — that was supposed to solve all these problems.

MCCAIN: I suspended...

HANNITY: In retrospect do you regret it at all?

MCCAIN: Well, I regret very much the way TARP was mishandled, but I suspended my campaign because Americans had just lost $1.2 trillion in the stock market in a 700-point plummet. I had to come back and do what I think is right when America's economy is in deep trouble, and we were told that if we did not vote for that, that America's economy would collapse.

Now, I think that it wasn't so much the vote for it, and I opposed any — since then obviously, but I think the key to this is, is the way that it was terribly mishandled.

HANNITY: All right. Let me just shift gears because we're going to debate whether or not Tim Geithner should be fired in a second here. I have one — well, actually two national securities. I'll fold it into one to make it easier for you.

Number one is the proposal that the administration would have wounded warriors have to pay for their own health care, and, secondly, as I look at the Obama mission in Afghanistan, I've got to wonder, it looks like the Bush plan as far as I can tell.

Any thoughts or comments? Do you see the same similarities as I do?

MCCAIN: First of all, on wounded warriors, that's not going to happen, and I'm confident that Congress will act if anything like that is proposed. On Afghanistan, there's a big debate going on within the administration right now. On the one side there's the minimalists, do what you can and get out, sort of like the strategy we employed in Iraq before General Petraeus and the surge strategy.

And then there's the others that no, you've got to go in, you've got to secure, it's going to be long and hard and tough. With the second group is the only one that will succeed.

HANNITY: All right, Senator, thank you for being with us tonight. We really appreciate it.

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