CINCINNATI (Reuters) - While U.S. President Barack Obama tries to claw back bonuses paid to AIG employees, Americans facing pay cuts and job losses are outraged that some refuse to share the pain of the recession.

“It’s not fair,” said Nancy Johns, echoing millions of Americans who watch with disbelief as Washington and Wall Street battle over whether to recover millions in corporate bonuses paid out by firms that received government bailouts.

AIG, an insurance giant that is being kept alive on a taxpayer-funded $180 billion lifeline, is paying out $165 million in bonuses for 2008. It has argued that it is legally obliged to meet employee retention payments.

Ordinary people have trouble understanding that logic.

Johns was working as a daycare provider in Cincinnati in 2007 when the economic downturn hit. The subsequent slump in daycare demand led to her work hours being cut from 40 hours a week to 25 -- dropping her weekly paycheck to just over $200.

“You couldn’t get enough hours to buy food for your kids,” said Johns, who has a five-year-old daughter. She quit her job, the family sold their second car, and she spent $20,000 to go back to school to retrain as a medical billing specialist.

Her year-long struggle has eased now that she has a job handling medical paperwork, but she’s outraged that some at the top rungs of the income ladder are helping themselves to big payouts while the less fortunate lose their jobs and homes.

“There were no guarantees for us,” she said.

Others question the financial merit of paying out bonuses in companies that were on the brink of the collapse until the government stepped in.

“I always thought bonuses were contingent on a job well done, not for simply showing up, or mindlessly driving the company over a cliff,” said Dave Blank, a medical supplies salesman in Milwaukee, Wisconsin.

“So what have those bonus-worthy executives done so well?”

CONCESSIONS MADE

In Arizona, unemployed manager Don Yows, 50, is furious about the AIG bonuses, which have prompted threats from the Obama administration and lawmakers in Congress and made newspaper headlines across the country.

“My frustration is two-fold: why they feel they are entitled to it, it’s a level of arrogance. I’m angry, angry. And number two, how they’ve gotten away with it so far,” said Yows, who lost his technology job in December.

“I’m looking for any job ... bonuses aren’t even a part of the consideration, it’s just getting a job and being gainfully employed right now.”

A belief that Americans have made concessions to help save jobs, especially in hard-hit sectors such as the auto industry, has helped to fuel the popular outrage over the corporate bonuses.

Thousands of white-collar workers have accepted unpaid furloughs, Congress forced U.S. automakers to wring concessions from their employees before receiving federal aid, and many workers have swallowed pay freezes.

At the same time others, particularly on Wall Street, say the furor over bonuses has been blown out of proportion. They note that the payouts represent a sliver of government bailout funds and resulted from legally binding contracts.

That argument, however, rankles Tony Montana, a spokesman for the United Steelworkers of America, which represents workers in industries as diverse as steel and nursing.

“A lot of companies have come to our union and said ‘Please let us renegotiate our contract,’” Montana said. “Our union has been very pro-active and very flexible with our employers because we do recognize the circumstances.”

“It is unfair to expect rank and file union members around the country to accept concessions or cutbacks while CEOs and other executives are raking in the benefits from their lucrative employment contracts,” Montana said.