First thoughts: Geithner in the spotlight
Posted: Monday, March 23, 2009 9:14 AM by Mark Murray
Filed Under:
First Thoughts
From Chuck Todd, Mark Murray, and Domenico Montanaro
*** Geithner in the spotlight: Treasury Secretary Tim Geithner steps back into the political spotlight today, and he’s no doubt hoping for a better reception than his previous trips onto the political stage. Today, Geithner will outline perhaps the most important proposal to getting the economy back on track: the plan to buy up as much as $1 trillion in troubled assets and mortgages. First, he holds a pen-and-pad briefing with reporters (which began at 8:45 am ET); he’ll appear in front of cameras (pool spray) with President Obama, FDIC chair Sheila Bair, and Fed chair Ben Bernanke later this morning; and he’s penned a Wall Street Journal op-ed on today’s plan. Of course, most of the recent chatter surrounding Geithner has been about if he’ll step down. But that’s about as likely as our chances of winning our NCAA pools (who else had Wake Forest going to the Final Four?). Not only did Obama tell “60 Minutes” that he’d refuse Geithner’s resignation, does anyone -- no matter your political views -- really believe it’s healthy for the financial system to have the president fire his Treasury secretary at this moment? Also, is it smart for a president in his first 100 days to ask Congress for a do-over on his Treasury pick? Imagine that confirmation hearing; it's political suicide. Bottom line: Common sense dictates that this is a far-fetched idea, and the focus on his future seems like a waste of time.
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Video: Geithner plans to unveil a new phase of the bank rescue plan.
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The AIG complication: What is perhaps most interesting about today’s toxic-asset plan is how the AIG bonus story has made some investors wary about the plan. “Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms,” the
New York Times writes. “The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress.” More: “Administration officials took to the airwaves Sunday to reassure investors that the public would distinguish between companies like A.I.G., which are taking government bailout money, and private investment groups that, under this latest plan, would be helping the government take troubled assets off the books of some of the country’s biggest banks.” Meanwhile,
Paul Krugman criticizes the administration’s toxic-asset plan. For those who think Krugman is turning on Obama, here’s this friendly reminder: When Krugman fully embraces something Obama’s doing, it will be the first time. He's been anti-Obama since the start of the Democratic primary campaign, and has barely written a positive word about him. He's a straw man for conservatives to claim liberals are turning on Obama; he's actually never embraced the president.
Video: A crucial week awaits the Obama administration as it deals with banks, budgets, toxic assets and the AIG bonuses.
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Clawing Back The Claw Back: Speaking of the AIG bonuses, it seems that President Obama has some concerns about Congress’ plan to claw them back by taxing them. Here’s what he told
“60 Minutes”: "Well, I think that as a general proposition, you don't want be passing laws that are just targeting a handful of individuals. You want pass laws that have some broad applicability. And as a general proposition, I think you certainly don't want use the tax code to punish people.” And the
Washington Post notes that the administration’s top economic officials “reacted coolly to congressional actions to recoup bonuses from financial firms through targeted taxes, with one adviser saying the approach may be a ‘dangerous way to go.’”
*** A GOP budget alternative? Last week, GOP leaders seemed to be disinclined to produce their own alternative budget. But GOP Rep. Mike Pence now says otherwise. Pence on ABC yesterday: "The House Republicans are going to come up with a budget alternative that is going to be built on fiscal restraint and getting this economy growing again." Asked if it will be a "comprehensive alternative," Pence replied: "It's going to be a comprehensive alternative. And let me tell you, after -- it's after months of runaway spending on the federal level. I mean, we saw last -- last year's Wall Street bailout, the part of -- auto bailout, and then we saw the so-called stimulus bill, then the omnibus bill." Was Pence on message with the rest of the congressional Republican team? Is McConnell ready for a full-fledged alternative? What about Cantor and Boehner? Pence is a principled guy, and we're guessing he's pushing for a full-fledged alternative while the more politically engaged members of leadership don't want to do this. *** UPDATE *** House Republicans have pointed out to us -- correctly -- that they have said they'd produce a budget alternative. It is Senate Republicans who have been disinclined to do so.
*** Recyling TARP funds into campaign cash? Per Newsweek, some U.S. financial institutions that are currently receiving TARP funds are STILL making political contributions to Democrats and Republicans. “In recent filings with the Federal Election Commission, the political action committee for Bank of America (which got $15 billion in bailout money) sent out $24,500 in the first two months of 2009, including $1,500 to House Majority Leader Steny Hoyer and another $15,000 to members of the House and Senate banking panels. Citigroup ($25 billion) dished out $29,620, including $2,500 to House GOP Eric Cantor, who also got $10,000 from UBS which, while not a TARP recipient, got $5 billion in bailout funds as an AIG ‘counterparty.’ ‘This certainly appears to be a case of TARP funds being recycled into campaign contributions,’ says Brett Kappell, a D.C. lawyer who tracks donations.” It's amazing. We're doing a detailed analysis, which will be posted on First Read later today. But needless to say, in the month of February, thousands of dollars exchanged hands between financial institution PACs and members of Congress and the political parties. In fact, Bank of America on Feb. 17, 2009, gave $15,000 EACH to the DSCC, DCCC, NRSC and NRCC. Who’s dumber here -- the banks that are cutting political checks in this environment, or the members of Congress or political parties who are asking for them? And what's the difference between an AIG using taxpayer money to fulfill bonus contracts, and Bank of America taking taxpayer money and funneling some of it BACK to Washington in the form of campaign contributions? And you wonder why the country and the press are so cynical sometimes.
*** Judge Drudge: If you’re asking yourself how some of the lengthy Obama interviews -- like Leno or “60 Minutes” -- get reduced into gaffes about the Special Olympics or whether or not President Obama is laughing too much, look no farther than Drudge. As he did during the general election, he has been working overtime to paint the current president in the most negative light. So far, with Obama’s approval rating in high 50s, low 60s, it hasn’t worked -- yet.
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