Geithner Defends AIG Deal

Expect fireworks: Treasury Secretary Timothy Geithner will tell Congress on Wednesday that he had no role in disclosures about AIG’s payments to banks as the head, at the time, of the Federal Reserve Bank of New York. Geithner will also defend his actions in rescuing AIG by repaying banks like Goldman Sachs in full, at the cost of billions of taxpayer dollars. The New York Times reported late Tuesday that a proposal to force AIG's trading partners to return $30 billion of AIG cash was rejected by Fed officials, who opted instead to let the banks keep the cash and to receive additional taxpayer funds. Former Treasury Secretary Henry Paulson is also to testify Wednesday. According to the testimony, he will tell the panel that Geithner and Fed Chairman Ben Bernanke "acted properly" in rescuing AIG.