Dodd Under Fire Over AIG Bonuses

AIG’s big bonuses have Congress in a fury. Senate Banking Committee Chair Chris Dodd admitted his staff agreed to water down executive pay provisions, essentially preserving the loophole that allowed the bonuses to go forward. But, the Democratic senator of Connecticut is pushing back hard, placing the blame on the Obama administration, saying that it is the Treasury Department that insisted on the inserting the loophole. Dodd also added that at the time he supported the action, he was not aware of any pre-existing AIG bonuses.

The longtime senator, first elected to Congress in 1974, has consistently been one of the safest, most popular Democratic incumbents, but currently he’s in trouble not only because of the AIG mess, but also in the polls. Two recent polls found Dodd trailing a theoretical challenger in his state.

ABC News’ Senior congressional correspondent Jonathan Karl weighs in with the facts on Thursday’s edition of Politics Live.

Govt. Insurance Option Under Attack

ABC News’ Teddy Davis reports:

As President Obama prepares to convene a health-care summit on Thursday, a conservative group has launched an ad campaign with the goal of defeating a government insurance option.

“My concern is that it would be too broad, too expensive, the government would underprice it and then drive everyone else out of the market,” Richard Scott, the head of Conservatives for Patients’ Rights, tells ABC News.

Creating a government insurance option that would operate alongside private insurers has emerged as a major flashpoint in the nascent health-care battle. Obama endorsed a public option during his presidential campaign and leading Democrats want to make sure that it survives.

“The thing that’s worth going to the mat over is the public entity because that is what the bill lives or dies on,” former Democratic National Committee Chairman Howard Dean told ABC News. “If the health insurance industry gets to write the bill, it will not be in there, and if that happens, we will not have done health reform.”

Conservatives worry that letting Americans enroll in a government insurance option would undermine private insurers because the government could set its reimbursement rate schedule below market prices.

Conservatives for Patients’ Rights is spending $500,000 on the first round of an ad campaign that includes cable television (Fox and CNN in Washington, DC), radio ads (Rush Limbaugh and Sean Hannity shows) and Web ads (FoxNews.com and Politico.com). More ads are expected to follow.

While the head of Conservatives for Patients’ Rights explains that his group wants to block a government insurance option from being enacted, the group’s first ad does not directly criticize such an approach.

Instead, it focuses on the positive principles of choice, competition, accountability, and personal responsibility; the “four pillars” it would like to see included in any reform package.

Watch the ad here.

ABC News’ Ferdous Al-Faruque contributed to this report.