Barack Obama's pound of flesh: $20bn compensation and no BP dividends.

Barack Obama has got BP to apologise and to make a down payment of $20 billion to be put into a special fund to help victims of the Gulf oil spill.

The payout is only the start of BP's pain. The White House was insistent that the $20bn (£13.5bn) was not a cap, and the company's chairman, Carl-Henric Svanberg, announced that BP would not be paying dividends this year. Svanberg's appearance at the White House was calculated to mollify public anger in America at the chief executive, Tony Hayward, who is due to testify on the spill before Congress tomorrow .

Obama said the $20bn – equivalent to two years of dividends for BP – may not be enough to honour all the economic claims against the company.

"This is not a cap," Obama told reporters. "The people of the Gulf have my commitment that BP will meet its obligations to them."

I, like many others, feared that BP would find a way to walk away from this without giving any compensation to the fishermen and others who had lost their livelihoods due to the spill and I am very pleased that Obama has shown such resolve in making BP set aside their dividends this year and begin to pay compensation to those who have been hurt by this.

Were George Bush still president I feel sure that this would never have happened.

Obama also extracted a commitment from BP for a $100m fund for oil rig workers put out of work by the moratorium on drilling – which the oil company had been resisting. Initially, Obama was expected to spend just 20 minutes in the meeting in the Roosevelt room, his personal first with BP executives since the gusher in the Gulf began 58 days ago.

But while White House and BP officials described the encounter as "constructive", it was clear there were contentious moments. "He is frustrated," said Svanberg.

One only needs to listen to Republicans and right wing pundits to see how this would be playing out were one of their own in the White House. It certainly wouldn't look like this. They would be demanding that the public pay the cost of the clean up.

Obama is, at least, insisting that BP accept full responsibility for the mess they have created.

UPDATE:

If one needed any proof that this would never have happened had the Republicans been in power, one only needed to listen to the insane Michelle Bachmann's reaction to the setting up of this fund.

The president just called for creating a fund that would be administered by outsiders, which would be more of a redistribution-of-wealth fund.

And she then voiced her support for BP.

They shouldn’t have to be fleeced and make chumps to have to pay for perpetual unemployment and all the rest.

According to Bachmann, asking BP to compensate people who have lost their livelihoods, is actually BP being "fleeced".

It's moronic.

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Tags: Obama, BP, Gulf oil spill, Svanberg, Hayward