AIG CEO Edward Liddy testified in front of lawmakers Wednesday as news continued to spread about the $165 million in bonuses the bailed-out insurance company paid its employees.

The company's chief executive officer tried to explain why millions of dollars in bonuses were paid out last week to employees of the fallen insurance company.

?Nobody knows better than I that we received generous amounts of government aid and we are aware that we must be good stewards of the funds that we have received,? Liddy said.

In his defense, Liddy pointed out the bonuses were negotiated before he joined the company late last year. He agreed they were in bad taste given the current economic climate, but that the company was legally obligated to pay them out.

Rep. Gary Ackerman (D-Manhasset) demanded more culpability from Liddy. He attacked AIG?s credit default swap program as patently dishonest.

?This is insurance without being insurance, because if they called it insurance, they would have to have money to pay you off,? Ackerman said to Liddy. ?But they don't have the money to pay you off, and they're calling it credit default swaps, because if they called it ?I Can't Believe It's Not Insurance,? maybe nobody would buy it.?

Residents that spoke to News 12 Long Island shared Ackerman?s outrage and agreed the bonus money should be returned.

Liddy told Congress Wednesday he has asked employees who received at least $100,000 in bonuses to give at least half of that money back. However, many lawmakers said they want to craft legislation to make sure they get the money back.

To see Rep. Ackerman's opening statements at the hearing, go to Channel 612 on your iO digital cable box and select iO Extra.