Tim Geithner fiscal cliff, When U.S. senators were picking apart the Obama administration’s plan for a stand-alone consumer- protection bureau during negotiations on the financial-rules overhaul, Treasury Secretary Timothy F. Geithner agreed to put it under the Federal Reserve to ensure that Republican lawmakers wouldn’t kill it.Geithner calculated the bureau wouldn’t be affected and backing down would help get the 2010 legislation passed.
His compromise illustrates the pragmatic approach Geithner embraced in pressing for Dodd-Frank during his four years at the Treasury and will need to draw on in one final test as the administration’s lead negotiator with Congress on the so-called fiscal cliff.
“There were some very ticklish issues that had to be dealt with,” former Senate Banking Committee Chairman Christopher Dodd, the bill’s co-sponsor, said in an interview. “Tim was certainly reaching out. He made a big difference in making sure we could keep people together on what we ultimately came up with.”
Geithner -- the longest-serving and most influential of President Barack Obama’s economic advisers -- will leave the Treasury in mid-January after testifying before Congress 67 times, appearing 24 times on Sunday talk shows and making 98 trips within the U.S. and abroad. He’s staying to deal with more than $600 billion in tax increases and spending cuts that take effect automatically in January unless Congress acts. If the cliff isn’t averted, the U.S. could fall back into recession, according to the Congressional Budget Office.
Higher Taxes
Geithner and the administration are insisting on higher taxes for the largest-income earners while pushing for an extension of middle-class tax cuts. Republicans have signaled a willingness to discuss those measures in exchange for reductions in entitlement spending.
Geithner goes into the talks shaped by crises. In September 2008, four months before he moved to the Treasury, he was president of the Federal Reserve Bank of New York when the government rescued insurer American International Group Inc. (AIG) and allowed Lehman Brothers Holdings Inc. to go into bankruptcy. By the end of 2009, Europe fell into a debt crisis and Geithner became the chief U.S. liaison with European officials.
“You learn a lot about someone in the midst of a crisis,” Henry Paulson, Treasury secretary under President George W. Bush during the bailouts, said in an interview. “He was a terrific partner and had great energy and stamina, someone who was always very calm.”
Deserve Credit
Paulson said Geithner deserves “great credit for skillfully navigating a very difficult transition and balancing the tendency of a new president to change direction while understanding the need to maintain stability and build on what had been put in place to restore the markets.”
The U.S. lost more than 2 million jobs in the first quarter of 2009, and gross domestic product was shrinking at a 5.3 percent annual rate. For the quarter ending Sept. 30 of this year, 521,000 jobs were added, and the economy grew at a 2.7 percent rate. The Standard & Poor’s 500 Index has more than doubled since reaching a 12-year low on March 9, 2009. Even so, the deficit has surpassed $1 trillion in each of the last four fiscal years, and public debt as a percentage of GDP is the highest since 1950.
Geithner will exit as one of the Obama administration’s most divisive figures because of his leadership roles in Dodd- Frank and the bailouts of Wall Street banks.
Supporters, Critics
Supporter Lee Sachs, a Geithner aide in 2009 and early 2010, says the Treasury secretary “probably did as much as anybody in the country to help prevent a depression.” He “is very good about making sure he understands the whole playing field and has done his homework,” Deputy Treasury Secretary Neal Wolin said in an interview. “And then he plays his cards very adroitly.”
Critics Sheila Bair, former chairman of the Federal Deposit Insurance Corp., and Neil Barofsky, former special inspector general of the bailout program, wrote books this year in which they accuse Geithner of being more interested in helping financial institutions than homeowners.
Geithner was “the bailouter in chief” who supported the “propping up of all the big banks,” Bair wrote in “Bull by the Horns.” She said Geithner advocated policies that accommodated weak institutions and didn’t put a priority on protecting taxpayers or helping households struggling to avert foreclosure.
His compromise illustrates the pragmatic approach Geithner embraced in pressing for Dodd-Frank during his four years at the Treasury and will need to draw on in one final test as the administration’s lead negotiator with Congress on the so-called fiscal cliff.
“There were some very ticklish issues that had to be dealt with,” former Senate Banking Committee Chairman Christopher Dodd, the bill’s co-sponsor, said in an interview. “Tim was certainly reaching out. He made a big difference in making sure we could keep people together on what we ultimately came up with.”
Geithner -- the longest-serving and most influential of President Barack Obama’s economic advisers -- will leave the Treasury in mid-January after testifying before Congress 67 times, appearing 24 times on Sunday talk shows and making 98 trips within the U.S. and abroad. He’s staying to deal with more than $600 billion in tax increases and spending cuts that take effect automatically in January unless Congress acts. If the cliff isn’t averted, the U.S. could fall back into recession, according to the Congressional Budget Office.
Higher Taxes
Geithner and the administration are insisting on higher taxes for the largest-income earners while pushing for an extension of middle-class tax cuts. Republicans have signaled a willingness to discuss those measures in exchange for reductions in entitlement spending.
Geithner goes into the talks shaped by crises. In September 2008, four months before he moved to the Treasury, he was president of the Federal Reserve Bank of New York when the government rescued insurer American International Group Inc. (AIG) and allowed Lehman Brothers Holdings Inc. to go into bankruptcy. By the end of 2009, Europe fell into a debt crisis and Geithner became the chief U.S. liaison with European officials.
“You learn a lot about someone in the midst of a crisis,” Henry Paulson, Treasury secretary under President George W. Bush during the bailouts, said in an interview. “He was a terrific partner and had great energy and stamina, someone who was always very calm.”
Deserve Credit
Paulson said Geithner deserves “great credit for skillfully navigating a very difficult transition and balancing the tendency of a new president to change direction while understanding the need to maintain stability and build on what had been put in place to restore the markets.”
The U.S. lost more than 2 million jobs in the first quarter of 2009, and gross domestic product was shrinking at a 5.3 percent annual rate. For the quarter ending Sept. 30 of this year, 521,000 jobs were added, and the economy grew at a 2.7 percent rate. The Standard & Poor’s 500 Index has more than doubled since reaching a 12-year low on March 9, 2009. Even so, the deficit has surpassed $1 trillion in each of the last four fiscal years, and public debt as a percentage of GDP is the highest since 1950.
Geithner will exit as one of the Obama administration’s most divisive figures because of his leadership roles in Dodd- Frank and the bailouts of Wall Street banks.
Supporters, Critics
Supporter Lee Sachs, a Geithner aide in 2009 and early 2010, says the Treasury secretary “probably did as much as anybody in the country to help prevent a depression.” He “is very good about making sure he understands the whole playing field and has done his homework,” Deputy Treasury Secretary Neal Wolin said in an interview. “And then he plays his cards very adroitly.”
Critics Sheila Bair, former chairman of the Federal Deposit Insurance Corp., and Neil Barofsky, former special inspector general of the bailout program, wrote books this year in which they accuse Geithner of being more interested in helping financial institutions than homeowners.
Geithner was “the bailouter in chief” who supported the “propping up of all the big banks,” Bair wrote in “Bull by the Horns.” She said Geithner advocated policies that accommodated weak institutions and didn’t put a priority on protecting taxpayers or helping households struggling to avert foreclosure.
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