Even as lawmakers assailed the chief of AIG at a hearing on Wednesday, the White House was again trying to get ahead of the AIG issue, as President Obama called on Congress to enact securities reforms to prevent a repeat.
On the South Lawn of the White House, Mr. Obama all but accepted the fact that the AIG issue is now his problem.
"The buck stops with me," the President said.
Meanwhile on Capitol Hill, there was lots of confusing talk about why a provision dealing with executive pay in the economic stimulus bill got watered down at the last minute.
Initially, Sen. Chris Dodd (D-CT) denied doing anything on the provision, as his spokeswoman repeatedly denied that Dodd moved to exempt existing contracts that provided for AIG-like bonuses.
But then Dodd fessed up on CNN later on Wednesday, saying that the Treasury Department wanted the change, and Republicans pounced.
"Senator Dodd's reversal on this issue is both astonishing and alarming," said a statement from the National Republican Senatorial Committee, the election arm for GOP Senators.
For Dodd, it's more unwelcome scrutiny, as he's still dealing with the aftermath of getting special treatment for a mortgage from Countrywide.
Now one thing about this provision that Dodd changed at the behest of the Treasury Department is that he claims he didn't even know about the AIG bonuses back in February when he was dealing with this executive pay provision in the stimulus bill.
The Treasury Department supposedly didn't like that and forced the change in the stimulus bill, to make sure that the restrictions on bonuses only applied on contracts made after February 11, 2009, the date the negotiations were finished on the stimulus bill.
None of this is going to help Dodd's image at all at home. He suffered in the last year from his embarrassing run for President, during which he basically moved his family to Des Moines, Iowa so he could campaing.
He also has had to battle stories related to charges that he got favored treatment for a mortgage from Countrywide.
This week saw Dodd get a respectable opponent already for the 2010 elections, as former GOP Congressman Rob Simmons announced he would take on Dodd.
Drip, drip, drip.
Democrats are violating one of the first rules of a good scandal. Don't get caught up in it, or else it may take you down the drain as well.
Dodd has now given Republicans an opening to go after him - he's the Senate Banking Committee chairman after all - and to go after Treasury Secretary Timothy Geithner.
He gets to testify in coming weeks about AIG as well, which shoud mean open season on Geithner, who now faces a pair of GOP calls for his resignation.
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