It looks like our President is now involved and hoping to block the bonuses from happening! That I like and very much appreciate!

WASHINGTON — President Obama on Monday vowed to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives, as the administration scrambled to avert a populist backlash against banks and Wall Street that could complicate Mr. Obama’s economic recovery agenda.

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury,” Mr. Obama said. He added that he had asked Treasury Secretary Timothy F. Geithner “to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”

Later in the day, a White House official disclosed that the administration would use a pending $30 billion installment for A.I.G. to recoup the $165 million in retention payments to A.I.G. employees in the business unit that brought the company to the brink of collapse last year.

“Treasury will be using this facility to address the excessive retention payments made to the A.I.G. Financial Products employees, which Treasury found to be completely unacceptable given that A.I.G. is already surviving on taxpayer funds,” said the official, who spoke on the condition of anonymity. “Treasury will be adding provisions to its new facility aimed at making taxpayers whole for the amounts of the offensive payments.”

Several repayment options were being considered, the official added.

In strongly worded remarks delivered in the White House East Room before small business owners, Mr. Obama called A.I.G. “a corporation that finds itself in financial distress due to recklessness and greed.”

“Under these circumstances, it’s hard to understand how derivative traders at A.I.G. warranted any bonuses at all, much less $165 million in extra pay,” Mr. Obama said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

White House officials said that the administration is not looking to take A.I.G. to court to stop the company from paying out the bonuses. But they said the Treasury Department would be trying to figure out what it can do to block A.I.G. from making the payments within the legal confines of A.I.G.’s contractual obligations to the executives.

“All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses,” said Mr. Obama, who called the issue one of “fundamental values.”

“All they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules,” he said, adding that the troubles with A.I.G. underscored the need for broad regulatory reform “so we don’t find ourselves in this position again.” His remarks were interrupted several times by applause from the audience of small-business owners.

The sharp presidential rebuke of A.I.G. is part of the White House effort to distance itself from abuses that could feed potentially disruptive public anger. Mr. Obama’s aides are worried that such anger could make it more difficult to win Congressional approval for the additional bailout packages that Mr. Obama has signaled may be necessary to stabilize the banking system. Already there have been moves in Congress to limit compensation for executives at banks and Wall Street firms that are receiving government help to survive.

Still, the president’s directive to his Treasury secretary to “pursue every legal avenue” against the payments seemed to conflict with statements over the weekend from the Treasury Department and from Lawrence H. Summers, Mr. Obama’s chief economic adviser in the White House, that the Treasury already had reviewed its legal options and concluded the administration had no power to stop the payments .

“We are a country of law,” Mr. Summers said on ABC-TV’s Sunday show. “This Week”:There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system,”

But increasing the pressure on A.I.G., New York State Attorney General Andrew M. Cuomo said on Monday that he would issue subpoenas to make the insurer release the names of the executives in its Financial Products subsidiary who received the bonuses, which were paid on Friday; their job descriptions, and details about their performance. In a letter to Edward M. Liddy, the company’s current chief executive, Mr. Cuomo said that if he did not receive the information by 4 p.m. he would issue subpoenas demanding compliance. After that deadline passed, Mr. Cuomo said that he had not received information he was seeking and would issue subpoenas for the data.

“I believe in transparency and disclosure,” Mr. Cuomo said on a conference call. “We believe taxpayers have a right to know.”

A.I.G. executives say that they are contractually obligated to pay the bonuses to their executives, including those who are part of the A.I.G. division where the company’s crisis originated.

The government’s rescue of the insurer began last fall with the Federal Reserve’s $85 billion emergency loan. The taxpayer assistance has now grown to $170 billion, and the government owns nearly 80 percent of the company. On Sunday, the company disclosed the names of dozens of financial institutions that benefited from the bailout money injected into A.I.G. that the insurer then paid out to satisfy financial contracts.

Jackie Calmes contributed reporting.