Tag Archives: Timothy Geithner

5 things Republicans hate about Jack Lew

The Week

President Obama’s nominee for Treasury secretary used to be well-regarded on the Right. Not anymore

“There was a time when Republicans liked Jack Lew,” President Obama’s chief of staff and nominee to replace Timothy Geithner as Treasury secretary, says Ezra Klein atThe Washington Post. “That time is no longer.” Senate Republicans, already gearing up for a fight over Obama’s nomination of former Sen. Chuck Hagel (R-Neb.) for defense secretary, are now promising a battle over Lew, also: Sen. Jeff Sessions (Ala.), the top Republican on the Senate Banking Committee, is even threatening to filibuster the nomination,vowing in a press release, “Jack Lew must never be Secretary of Treasury.” What do Republicans have against the quiet, slightly nerdy Orthodox Jew who brings his own lunch — a cheese sandwich and apple — to work at his West Wing desk and still resides in the Bronx? Here, five reasons behind the GOP’s newfound hatred of Jack Lew:

1. He’s a tough, wonkish negotiator
Lew has worked in Washington since 1973, and until 2011 he had a reputation as “a committed progressive who Republicans liked and thought they could do business with because he’s also a pretty hard-boiled numbers guy,” says Matthew Yglesias at Slate. Then came the budget wars of 2011, when Lew — then director of the White House Office of Management and Budget — used his deep knowledge of budgetary math against them, refusing to let Republicans offset spending cuts with vague tax-reform “flim-flam.” Don’t let Lew’s “nerdy exterior” fool you, says Massimo Calabresi at TIME. He’s a fierce negotiator and “a passionate progressive on the issue of wealth disparity and programs for the poor” — Democrats credit him with saving Medicaid from GOP scalpels. Republicans simply don’t want to face such “a formidable opponent as Washington heads into more tough negotiations over the budget.”

2. Republicans feel he’s condescending and wily
It’s not just that Lew is a “wonk Zelig” — he has “played a role in every big budget deal since 1983,” says Joshua Green at Bloomberg Businessweek. Republicans chafed at “his insistence on explaining in detail the impact of the cuts Republicans were proposing” during the 2011 negotiations. In fact, “Republicans found Lew condescending, inflexible, and a bit sneaky,” saysThe Washington Post‘s Klein. Democrats dismiss these complaints as “sour grapes,” but as the GOP sees it, Lew “often seemed to be trying to trick them into agreeing to complicated policies that ultimately redounded to the administration’s benefits.” And in at least one case, he did outfox the GOP.

3. Lew is a Democrat’s Democrat
Geithner, the outgoing Treasury secretary, is also wonkish, but he’s mostly a financial technocrat. Lew is a partisan Democrat, and his résumé is impressively full of liberal lore: During his one year at Minnesota’s Carleton College, Lew’s academic adviser was Paul Wellstone, who would go on to become a progressive icon in the U.S. Senate; Wellstone convinced him to enter politics, and his first big job in Washington was budget analyst and negotiator for legendary House Speaker Tip O’Neill, alongside MSNBC star Chris Matthews; and he was Bill Clinton’s OMB director and later Hillary Clinton’s deputy secretary of state before joining the Obama White House. Given the extreme polarization in Washington, this history doesn’t exactly endear him to Republicans.

4. He agrees with Obama
“When it comes to worldview,” says Noam Scheiber at The New Republic, “Lew is Obama in coke-bottle glasses.” That actually makes some Democrats nervous, given both men’s “romantic [views] about the virtues of a deficit grand-bargain.” But it makes even more Republicans livid, given their hatred of Obama, says Jonathan Chait at New York. It’s absurd, but “Lew’s disqualification,” according to Sessions and other Republicans, seems to boil down to “that he doesn’t agree with Republicans on public policy issues.” This is Obama’s cabinet, and it should reflect his policy views, of course. But I guess in today’s Washington “Lew is unacceptable because Republicans want to pick the person on both sides of the negotiating table.”

5. Republicans are just jockeying for leverage
Among the real sense of being burned by Lew is at least an element of crass political theatrics. The looming confirmation fight is a rare opportunity to grill the president’s chief of staff, and “Republicans say Jack Lew will have to answer for what they view as the president’s bare-knuckle tactics,” says Alexander Bolton at The Hill. The GOP is especially “flummoxed… by Obama’s blunt refusal to even negotiate legislation to raise the debt ceiling,” unlike in 2011, when Bill Daily was chief of staff, and they blame Lew for the change in tactics. Republicans might also use Lew’s confirmation hearings as leverage to extract steep spending cuts in the upcoming budget fight. “They would be foolish not to use this opportunity to lay the foundation for their strategy on the debt ceiling,” political scientist Larry Sabato tells The Washington Examiner. This is one “high-profile hearing that they don’t want to let go to waste.”

 

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Filed under Jack Lew, Timothy Geithner

Outrageous! Washington’s jaw drops at possibility of AIG lawsuit…

This week the AIG board will consider whether to join a $25 billion lawsuit. | AP Photo

Unbelievable…

Politico

Remember when AIG took a $182 billion bailout only to turn around and hand out seven-figure bonuses to the same guys who tanked their company?

Grab the pitchforks — it gets better.

Now the insurance organization might join a lawsuit against the U.S. government over the terms of the bailout — saying the deal that saved the company cheated shareholders.

Treasury Secretary Timothy Geithner — who faced calls for his firing over the AIG bailout — and Federal Reserve Chairman Ben Bernanke are furious, according to one Democratic lawyer. Other officials inside the agencies were angered by the news, too, sources in the department told POLITICO.

Neil Barofsky, former inspector general for the Wall Street bailout said AIG’s possible lawsuit would be a “giant middle finger to the taxpayer.”

One of President Barack Obama’s top aides agreed: “Definition of Chutzpah: AIG, saved by taxpayers, contemplating suit,” David Axelrod tweeted.

Many Treasury and Fed insiders have long believed the terms of the AIG bailout — which only wrapped in recent weeks — were far too generous, not too punitive as the lawsuit is expected to contend.

This week, the AIG board will consider whether to join a $25 billion lawsuit over whether the terms of the bailout were unfair to shareholders, who claim they were deprived of billions of dollars.

AIG began airing ads in recent weeks that say “thank you” to Americans for the rescue — a sentiment AIG’s CEO Robert H. Benmosche assured is sincere in a statement the company released Tuesday night.

“AIG has paid back its debt to America with a profit, and we mean it when we say thank you to the American people,” said Benmosche.

He went on to explain that the company has no choice but to consider suing the government. “At the same time, the board of directors has fiduciary and legal obligations to the company and its shareholders to consider the demand served on us and respond in a fair, appropriate, and timely manner. Tomorrow’s board meeting is about listening to all of the parties involved and gaining a thorough understanding of the issues. We anticipate making a decision in the next several weeks.”

The Treasury and the Fed haven’t released official responses to the news of the potential lawsuit, first reported by The New York Times.

One former administration official, who worked on the AIG bailout, was in a state of disbelief.

“I can’t imagine that they will actually do it. Because whatever recovery they might possibly gain would be totally swamped by the enormous hit to their reputation,” the former official said. “What I don’t understand is why they have not ruled it out already. They have had plenty of opportunity to do so.”

Continue on Page 2…

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GOP Presidential Candidates Ignore S&P’s ‘Blast At Republicans,’ Pin Downgrade Blame on Obama

The GOP’s ultimate goal is to make President Obama a one-term president.  Their strategy is simply to blame him for everything, even though the electorate and everyone in the media knows this current fiscal crisis is on them…

Think Progress

On Friday, the credit rating agency Standard & Poorsdowngraded the U.S. from AAA to AA+ in the first downgrade in U.S. history. In its release, S&P took Republicans to task for using the debt ceiling as a political football and refusing to consider new revenues as an option for reducing the country’s long-term deficit. As National Journal put it, “it’s hard to read the S&P analysis as anything other than a blast at Republicans.”

However, you wouldn’t know that from reading the statements the GOP presidential candidates released in the wake of S&P’s announcement. In their world, the downgrade was entirely due to government spending, and the way to turn things around is to balance the budget without raising any additional revenue:

MICHELE BACHMANN: “We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time. I call on the President to seek the immediate resignation of Treasury Secretary Timothy Geithner and tosubmit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

MITT ROMNEY: “Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.”

JON HUNTSMAN: “Out-of-control spending and a lack of leadership in Washington have resulted in President Obama presiding over the first downgrade of the United States credit rating in our history. For far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread.”

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Filed under GOP Myopia, S&P Downgrades

Bill Clinton: I’d use 14th amendment

Former President Bill Clinton would invoke the 14th Amendment – “without hesitation, and force the courts to stop me,” he says – to raise the debt ceiling if he were in President Barack Obama’s shoes, with the deadline to raise the limit just two weeks away.

“I think the Constitution is clear and I think this idea that the Congress gets to vote twice on whether to pay for [expenditures] it has appropriated is crazy,” Clinton said in an interview with journalist Joe Conason.

Clinton said he would turn to the Constitution “if it came to that,” but doesn’t think that Obama will need to. “It looks to me like they’re going to make an agreement, and that’s smart,” he said.

Obama has sidestepped direct questioning about invoking a clause in the amendment to the Constitution that has been interpreted by some to mean that the president has the authority to take all necessary steps to maintain the good credit of the United States. But a lawyer for the Treasury Department has publicly refuted that interpretation, saying that Secretary Timothy Geithner has “never argued that the 14th Amendment to the U.S. Constitution allows the president to disregard the statutory debt limit.”

Clinton said that raising the debt ceiling “is necessary to pay for appropriations already made.” Congressional Republicans, he said, “can’t say, ‘Well, we won the last election and we didn’t vote for some of that stuff, so we’re going to throw the whole country’s credit into arrears.”

The former president also noted that he could have faced a similar crisis during his own time in office, when congressional Republicans weighed blocking a debt ceiling hike. Republicans “did think about doing that … and I knew they were thinking about it,” but they decided against it because “they didn’t want to get caught” in a position where they might be seen as attacking Clinton’s two immediate predecessors, both Republicans.

“The reason that raising the debt limit is so unpopular is that people think you’re voting to keep [increasing] deficit spending, instead of voting to honor obligations that were already incurred,” he said. “I think [the Gingrich Republicans] figured I’d be smart enough to explain to the American people that they were refusing to pay for the expenses they had voted for when Ronald Reagan and George H.W. Bush were president. And that would make ‘em look bad.”

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A user’s guide to the debt debate

 

Here’s a handy guide that MSNBC has laid out for those of us who are “debt limit challenged”.  

MSNBC

What really happens if the U.S. fails to pay interest, principal on Treasury bonds?

President Barack Obama and Republican congressional leaders are locked in a tense standoff over how much spending and debt the federal government can afford. Here’s a guide to the fight over the debt limit:

What is the debt limit?
It is the statutory limit on the amount of federal debt.

In February 2010, Congress passed legislation to increase the debt limit to $14.29 trillion. Since 1993, Congress has voted to increase the debt limit 16 times.

Treasury Secretary Tim Geithner has warned Congress that if it doesn’t vote to increase the debt ceiling before the government reaches its borrowing limit on Aug. 2, it would trigger a default by the United States.

A default “would have catastrophic economic consequences that would last for decades,” Geithner said, by spurring ruinously high interest rates and threatening “the dollar’s dominant role in the international financial system.”

Why are congressional Republicans refusing to raise the debt ceiling?
Republicans argue that federal spending — which is now nearly 25 percent of GDP —  must finally be brought under control. The only way to force Obama to agree to spending cuts is to refuse to raise the debt limit, they argue.

Obama said Monday that he agrees with Republicans that trillions of dollars of spending cuts are needed over the next decade, but he also wants to get rid of certain tax breaks that cause the government to lose revenue. At a Tuesday press briefing, he invited congressional leaders to continue negotiations at the White House.

Negotiators for the Obama administration and Congress have discussed about $2.4 trillion in spending cuts over the next ten years — about a 5 percent cut in total projected spending.

“I believe the Republican strategy will eventually result in some increase in the debt limit with very limited tax increases, but none of those tax increases will be in marginal (income tax) rates,” said Bill Hoagland, former top staffer on the Senate Budget Committee under Sen. Pete Domenici, R-N.M.

Continue reading here…

 

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FMR. GOP SEN. ALAN SIMPSON CALLS REPUBLICAN REFUSAL TO RAISE REVENUE ‘ABSOLUTE BULLSHIT’

Former Republican Senator Alan Simpson has said many shocking things recently, some of them I have actually taken offense to.  However this time, I agree with him totally.

Think Progress

Former GOP Sen. Alan Simpson blasted his intransigent GOP colleagues on the hill today for failing to reach a deal on the deficit.

The expletive-prone co-chairman of President Obama’s bipartisan fiscal reform commission slammed Republicans for kowtowing to American for Tax Reform head Grover Norquist (“Republicans can’t be in thrall to him”) and pushed Treasury Secretary Tim Geithner to stand fast on the August 2 deadline.

Surveying the lay of the current fiscal land, Simpson said “We’re at 15 percent revenue, and historically it’s been closer to 20 percent.” “We’ve never had a war without a tax, and now we’ve got two,” he added. “Absolute bullshit.”

 

 

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Report: Feds Preparing Massive Sweep Of Insider Trading In Financial Sector

It’s about damn time!  I’m hoping that the aftermath will weed out a few crooked Congressmen and Senators on both sides of the aisle, as well. 

This is the sort of thing that allows me to maintain a little faith in the Obama administration.  Just when you think those guys have muddled so many things in the name of “bi-partisanship”, they surprise us with this bit of news.  I’m thinking, masterful chess move by the Feds and Obama.

The mortgage and foreclosure bankster scams should be next! 

It goes back to John Kenneth Gailbraith and Jack Clark’s words…

ALL YOU NEED TO KNOW

The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
John Kenneth Galbraith

THE JACK CLARK COROLLARY –

The Rational Radical

Everything the right-wing does is designed to accomplish one of two things, either:
(a) transfer wealth from everyone else to the rich, or,
(b) distract everyone else from the fact that (a) is occurring.

Wall Street Journal

Federal authorities, capping a three-year investigation, are preparing insider-trading charges that could ensnare consultants, investment bankers, hedge-fund and mutual-fund traders and analysts across the nation, according to people familiar with the matter.

The criminal and civil probes, which authorities say could eclipse the impact on the financial industry of any previous such investigation, are examining whether multiple insider-trading rings reaped illegal profits totaling tens of millions of dollars, the people say. Some charges could be brought before year-end, they say.

The investigations, if they bear fruit, have the potential to expose a culture of pervasive insider trading in U.S. financial markets, including new ways non-public information is passed to traders through experts tied to specific industries or companies, federal authorities say.

Read the whole story: Wall Street Journal

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Robert Reich on the Super Rich Getting Richer While Everyone Else Gets Poorer

Robert Reich

Image via Wikipedia

Robert Reich is the man whom I hope President Obama chooses to replace Larry Summers who is head of the White House’s National Economic Council, a position created by former President Bill Clinton during his presidency.

Robert Reich was then President Clinton’s Secretary of Labor.  Reich would be the ideal person to replace Summers.  Robert Reich is a progressive and knows his economics.  Obama decided to surround himself with a Wall Street alumni economic team.  I honestly hope that Reich and/or Paul Krugman will be called in to turn our economy around, to benefit “the people” and not Wall Street.

America Blog

At least we have a White House that understands the problem since he’s a Democrat and not just another run of the mill corporatist who is part of the problem. More from Robert Reich.

The super-rich got even wealthier this year, and yet most of them are paying even fewer taxes to support the eduction, job training, and job creation of the rest of us. According to Forbes magazine’s annual survey, just released, the combined net worth of the 400 richest Americans climbed 8% this year, to $1.37 trillion. Wealth rose for 217 members of the list, while 85 saw a decline.

For example, Charles and David Koch, the energy magnates who are pouring vast sums of money into Republican coffers and sponsoring tea partiers all over America, each gained $5.5 billion of wealth over the past year. Each is now worth $21.5 billion.

Wall Street continued to dominate the list; 109 of the richest 400 are in finance or investments.

From another survey we learn that the 25 top hedge-fund managers got an average of $1 billion each, but paid an average of 17 percent in taxes (because so much of their income is considered capital gains, taxed at 15 percent thanks to the Bush tax cuts).

 

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Filed under Economic Inequality, Economy