President Obama sought to regain the initiative over his domestic agenda yesterday as the uproar over bonuses paid to the stricken insurance company AIG continued to threaten his Administration and derail his hugely ambitious economic rescue plan.

Getting about as far as possible from the rage and blame game over the bonuses that is consuming Capitol Hill, Mr Obama pushed his $3.6 trillion budget in a speech at an electric car plant in California, held a town hall rally in Los Angeles with Arnold Schwarzenegger, the Republican Governor, and was planning last night to take an unprecedented step for a US president: an appearance on The Tonight Show with Jay Leno.

Yet as he again employed what has become a frequent tactic in his young presidency – taking his policy agenda directly to voters outside Washington – the AIG scandal and a string of other grim economic news underscored the growing challenges that Mr Obama faces in getting his economic agenda through Congress.

The anti-Wall Street sentiment on Capitol Hill turned uglier when it emerged that 13 companies rescued with billions of dollars of bailout money owe $220 million in taxes.

“This is shameful. It is a disgrace,” said John Lewis, the Democratic chairman of the House of Representatives committee overseeing the $700 billion Wall Street rescue package passed in October. “We are going to get to the bottom of what is going on here.”

Last night the House overwhelmingly passed a Democratic-backed Bill that would tax bonuses paid by companies propped up with federal bailout money at 90 per cent, a controversial move aimed primarily at clawing back the AIG bonuses. Meanwhile, more Republicans called for the resignation of Timothy Geithner, Mr Obama’s Treasury Secretary, over the AIG scandal.

The insurance giant paid $165 million in bonuses after it was rescued from collapse by $170 billion of taxpayers’ money. The revelation sparked enormous popular and political anger that is threatening to turn against Mr Obama and his Administration.

It emerged yesterday that the Federal Reserve knew about the bonuses months ago, yet Mr Geithner says that he learnt about them at his Treasury Department only on March 10, three days before they were paid. John Boehner, the House of Representatives Republican leader, said that Mr Geithner was “on thin ice”, while at least three of his colleagues have called on him publicly to resign.

Mr Geithner refuses to step down, though last night he took “full responsibility” for the fiasco.

The Congressional Budget Office added to Mr Obama’s problems by indicating that it will project today a budget deficit fully $1 trillion more than that predicted in the President’s ten-year budget released this month. Judd Gregg, the Republican senator who was picked to be the President’s Commerce Secretary only to drop out, declared of the ballooning deficit projections: “You cannot finesse the coming fiscal calamity.”

Mr Obama, who will hold a prime-time press conference next Tuesday, was using his appearance with Mr Schwarzenegger – who supported his $787 billion economic stimulus package passed last month – in part to make Republicans on Capitol Hill appear as partisan obstructionists.

His aides also argue that real voters are focused on jobs and healthcare, and not on the inter-party squabbling dominating Capitol Hill. “It’s always good to get out of Washington for a little while,” Mr Obama said to laughter at the beginning of his speech.

One man thriving in this recession is Mr Obama himself. Financial disclosure forms show he earned $2.5 million last year in book royalties and received $500,000 more five days before he took office for a “young adult” version of his memoir Dreams from My Father.

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