Dem lawmaker says new AIG assistance unlikely to work

The federal government’s new $30 billion installment support for troubled insurer AIG is unlikely to work, one Democratic lawmaker said Monday.

“If I were a betting person and asked whether I think this is going to work, I’d say probably not,” Rep. Elijah Cummings (D-Md.), a senior member of the House Oversight and Government Reform Committee, said during an interview with Bloomberg television this morning. “In the AIG situation, my best judgment says that this is going to be very difficult to stop the hemmoraging, but at least let’s try.”

Cummings said that he supported the increased bailout of the insurance giant after AIG posted the largest quarterly loss in history. The Maryland Democrat said that Congress was obliged to help because ofthe large volume of Americans holding insurance policies through AIG.

But Cummings also added that he would be “very reluctant” to back a fourth payment to AIG, should the company say down the line it needs more money.

Cummings also told Bloomberg that it is a “very good possibility” the Obama administration would have to ask for more funds for the Troubled Asset Relief Program (TARP) activities, which have been used to shore up AIG, the financial industry, and troubled automakers since being approved by Congress this past fall.

Click here to watch the interview with Cummings.