Congressional Democrats careened between the circular firing squad and the three-ring circus Tuesday as they struggled with their new reality: playing defense on the economy.

Sen. Robert Menendez (D-N.J.) blamed Treasury Secretary Timothy Geithner for letting bailed-out insurance giant American International Group pay $165 million in bonuses to its employees, saying he wrote a letter to Geithner two weeks ago warning him of just such a possibility.

Sen. Chris Dodd (D-Conn.), tagged by Republican aides for sponsoring an amendment to the stimulus bill that allowed the bonuses, shifted the blame to the Treasury Department and “the bill conferees,” saying he had no idea that the AIG bonuses were coming.

Sen. Max Baucus (D-Mont.), joined by Sen. Chuck Grassley (R-Iowa), introduced a bill that would impose a 70 percent tax on “excessive” compensation paid to employees of all bailed-out companies. President Barack Obama has said the White House would use all legal means possible to get the bonuses back, but House Majority Leader Steny H. Hoyer (D-Md.) acknowledged that there were “some questions” as to whether Congress could do anything at all.

And while Hoyer begged AIG execs to give up the money voluntarily, Senate Majority Leader Harry Reid (D-Nev.) just tried to change the subject. Asked about Geithner’s role in failing to stop the bonuses, Reid said: “Let’s talk about what we have accomplished this Congress.”

Nice try.

Read the rest of the story at The Politico

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