[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/POLITICS/03/18/aig.bonuses.congress/art.dodd.cnn.jpg caption="Sen. Dodd told CNN Wednesday that officials in the Treasury Department asked him to add the bonus loophole to the stimulus bill before it was passed."]
CNN Financial News Producer
The controversy surrounding bonuses at AIG hit a boiling point Wednesday when company CEO Edward Liddy testified before a House Financial Services subcommittee.
Liddy, who was grilled by lawmakers, addressed one of the key questions surrounding the controversy: When did officials first learn that AIG was planning to give those bonuses that CNN first reported on last December?
Liddy said Fed Chairman Ben Bernanke knew about the payments for three months and Treasury Secretary Tim Geithner found out about them two weeks ago - a week before Geithner has said he first heard of the bonuses from his staff. The Treasury Department, however, said Liddy was mistaken.
Meanwhile, Senate Banking Committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.
Dodd acknowledged his role in the change after a Treasury official told CNN the administration pushed for the language.
Both Dodd and the official, who asked not to be named, said it was because Obama administration officials were afraid the government would face numerous lawsuits without the new language.
CNN’s Chief Financial Correspondent Ali Velshi is in Washington today to interview Secretary Geithner and ask him how the provision protecting AIG bonuses got into the stimulus bill and what Dodd’s role was.
Meanwhile, Democratic leaders in the House plan to introduce legislation today to try to recoup bonuses paid to Wall Street executives with taxpayer money.
The measure would tax individuals on any bonuses they receive from companies getting $5 billion or more in TARP money. Bonuses for people with incomes over $250,000 would be taxed at a 90% rate. It affects bonuses received after Jan. 1, and applies not only to employees but former employees as well.
As for AIG, Liddy says he has asked those who received $100,000 or more to return at least half of it. But he says he will not release the names of those executives for their own safety.
Separately, the Obama Administration today announced a new $5 billion bailout for the nation’s auto-parts suppliers, which have been hammered by the severe downturn facing Detroit’s automakers.
The rescue plan would pump money into dozens of the country's biggest suppliers to help pay for all the parts shipped to the Big Three automakers – but that have not been paid for. Dozens of suppliers have been struggling as car sales have tumbled and bills for previous parts shipments have gone unpaid.
The number of Americans filing initial claims for jobless benefits dipped last week, but the total number of people continuing to receive benefits set a fresh record high.
First-time claims for unemployment insurance dropped by 12,000 to a seasonally adjusted 646,000 from the previous week's revised figure of 658,000. The number of people receiving benefits for one week or more, however, increased by 185,000 to 5.47 million.
That is once again the highest number on records dating back to 1967.
The Fed announced Wednesday it would buy $300 billion of long-term Treasurys over the next six months in order to try and get credit flowing more freely again.
The central bank also announced plans to buy an additional $750 billion in mortgage-backed securities, a move designed to lower mortgage rates.
The Fed also left interest rates unchanged at a target range of 0% to 0.25% - where they have been zero since December.
Gas prices rose 1.3-cents overnight at $1.933 a gallon. 11 states and the District of Columbia have regular unleaded gas prices of $2 and higher. 39 states have regular unleaded gas prices below $2. The highest gas prices are in Alaska ($2.508). The cheapest gas prices are in Wyoming ($1.748)
Finally, Americans are losing confidence in their ability to keep their current standard of living.
Thirty-nine percent of people questioned in a CNN/Opinion Research Corp. survey released today say they're very confident they'll be able to maintain their standard of living over the next year. That's down 6 points from last year.
The number of homeowners with a mortgage who say they are very confident that they can continue to meet their payments is also down, as is Americans' confidence in their ability to pay debts such as credit cards and car loans.
Additionally, only one in four parents of children younger than 18 say they are very confident in their ability to pay for college. And only one in five who have not already retired say they are very confident in their ability to save enough to retire comfortably.
Anderson Cooper goes beyond the headlines to tell stories from many points of view, so you can make up your own mind about the news. Tune in weeknights at 8 and 10 ET on CNN.
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