Geithner Seeks New Powers Over Financial Co's.
Associated Press
Transcript
in a rare joint appearance on capitol hill treasury secretary geithner and fed chairman bernanke said they tried to stop the aig bonuses i called ed liddy the ceo of this company and asked him to seek to renegotiate these payments he explained that the contracts for the retention payments were legally binding i then asked that suit be filed to prevent the payments legal staff counseled against this action on the grounds that connecticut law provides for substantial punitive damages if the suit would fail but many lawmakers clearly aren't pleased if federal officials had exercised effective proactive oversight at the company we could have prevented this problem both bernanke and geithner say the government needs fdic-like power to deal with other companies like aig whose collapse could the economy we need to extend those protections and authorities to cover the risks posed by our more diverse and complicated financial system today aig's once proud name has been tainted by the bailouts and the bonuses and as part of an effort to change its image its lower manhattan building no longer sports an aig sign but taxpayers say it'll take a lot more ag has a long way to go as far as corporation their morals their morality their the backbone and how they function really needs to be set up in a more proper manner the rage which prompted the house to quickly approve a 90 percent tax on the bonuses has waned somewhat here on capitol hill partly because some of the recipients have agreed to return the money senate action which had been expected this week has now been pushed back until at least the middle of next month jerry bodelander the associated press capitol hill
March 24: Stocks Fall, but Keep Some Ground
Associated Press
Transcript
stocks gave back some gains tuesday as investors looked for direction a day after the market's biggest advance in five months a pullback was expected after monday's 498-point surge which was in response to the government's plan to help banks dispose of bad loans but while investors responded positively to the plan to buy up bad debt analysts were more restrained i am concerned about the execution of it i'm thinking uh certainly there are there is risk on both parts of that and will be more costly for the taxpayers is certainly a concern the dow jones industrial average ended the session down 115 points at 7660 the standard and poor's 500 index shed 17 to end at 806 and the nasdaq dipped 38 to close at 1 517. james limbach the associated press
Obama Addresses Deficit Critics
Associated Press
Transcript
first of all I suspect that some of those Republican critics have a short memory because as I recall I'm inheriting a 1.3 trillion dollar deficit annual deficit from them uh that would be Point number one Point number two both under our estimates and under the CBO estimates both conserv the most conservative estimates out there we drive down the deficit over the first five years of our budget the deficit is cut in half and folks aren't disputing that where the dispute comes in is what happens in a whole bunch of out years and the main difference between the budget that we presented and the budget that came out of congressional budget office is assumptions about growth they're assuming a growth rate of 2.2 we're assuming a growth rate of 2.6 those small differences end up adding up to a lot of money our assumptions are perfectly consistent with what Blue Chip forecasters out there are saying now uh none of us know exactly what's going to happen six or eight or ten years from now here's what I do know if we don't tackle energy if we don't improve our education system if we don't drive down the costs of Health Care if we're not making serious investments in science and technology and our infrastructure then we won't grow 2.6 percent we won't grow 2.2 percent we won't grow and so what we've said is let's make the Investments That ensure that we meet our growth targets that put us on a pathway to growth as opposed to a situation in which we're not making those Investments and we still have trillion dollar deficits what we're trying to emphasize is let's make sure that we're making the Investments that we need to grow to meet those growth targets at the same time we're still reducing the deficit by a couple of trillion dollars we are cutting out wasteful spending in areas like Medicare we're changing procurement practices when it comes to the Pentagon budget we are looking at Social Service programs and education programs that don't work and eliminate them and we will continue to go line by line through this budget and where we find programs that don't work we will eliminate them
Obama: More Authority Needed to Deal With AIG
Associated Press
Transcript
it is precisely because of the lack of this Authority that the AIG situation has gotten worse understand that AIG is not a bank it's an insurance company if it were a bank and it had effectively collapsed then the FDIC could step in uh as it does with a whole host of banks as it did with indac uh and in a structured way renegotiate contracts get rid of bad assets uh strengthen Capital requirements resell it uh on the private Marketplace so we've got a regular mechanism whereby we deal with uh FDI insured Banks we don't have that same capacity with an institution like AIG and that's part of the reason why it has proved so problematic I think a lot of people understandably say well if we're putting all this money in there uh and if it's such a big systemic risk to allow AIG to liquidate uh why is it that we can't restructure some of these contracts why can't we do some of the things that need to be done in a more orderly way and the reason is is because we have not obtained this Authority we should have obtained it much earlier so that any institution that poses a systemic risk that could bring down the financial system uh we can handle uh and we can do it in an orderly fashion that quarantines it from other institutions we don't have that power right now that's what secretary gner was talking about and I think that there's is going to be strong support from the American people and from Congress uh to provide that Authority so that we don't find ourselves into a situation where we've got to choose between either allowing uh an enormous institution like AIG which is not just ensuring other Banks but is also ensuring Pension funds and uh potentially putting people's 401ks at risk if it goes under that's one choice and then the other choice is just to allow them to take taxpayer money without the kind of conditions that we'd like to see on it so that that's why I think the authority is so important why should the public trust the government to handle that Authority well well as I said before if you look at uh how the FDIC has handled a situation like Indie bank for example uh it actually does these kinds of uh resolutions effectively when it's got the tools to do it we don't have the tools right now
Obama On Primetime, Again
CBS
Transcript
just one day after rolling out his plan to deal with toxic assets the president today was on to the next piece of his economic puzzle we are already hard at work in putting forward a detailed proposal AIG and its controversial bonuses are likely to be hot topics in tonight's press conference the White House says before taking questions the president will give an update on how his economic plan is faring according to excerpts he'll say we've put in place a comprehensive strategy designed to attack this crisis on all fronts it's a strategy to create jobs to help responsible homeowners to restart lending and to grow our economy over the long term and we are beginning to see signs of progress till then pivot to the next big economic battle is massive 3.6 trillion dollar budget for next year which includes expensive initiatives in education and renewable energy and an ambitious overhaul of the health care system Republicans are already up in arms president's budget is the most fiscally irresponsible budget in the history of the United States these types of proposals will bankrupt our economy and destroy thousands of jobs around our country some moderate Democrats are also worried about cost senator Kent Conrad chairman of the Budget Committee today rejected the president's request for a 250 billion dollar rainy day fund in case more bank bailouts are needed tonight's press conference is the latest appearance in a media blitz that included town halls and a visit with jay leno in California last week and a lengthy 60 minutes interview Sunday John Dickerson of Slate Magazine says there is a risk to so much exposure the problem or the downside of course is one they are aware of at the White House which is that he can be on TV too much you can be talking too much and that sort of diminishes the brand but the White House says they have no choice but to put the president out there again and again and again because they say he is by far their best salesman Katie and chip obviously the economy is job one for the president but he's got some pretty thorny foreign policy issues on his plate as well the Afghanistan policy review out Friday and he'll be traveling to Europe for the g20 summit and then the 60th suree of NATO next week so foreign policy is likely to come up tonight absolutely quite a bit Katie you know just as he's making a pivot from the recovery plan to the budget he's also making a big pivot from the economy to foreign policy today in the White House the president said the threat of terrorist attacks from al-qaeda is not a threat that's gone away it's important for us to stay on the offensive dismantle these terrorist organizations in places like Afghanistan and he will have that review out later this week and on the economy he said this is a global crisis that cannot be solved without the nations of the world working together and he'll be doing that a week from now in London Katie
Selling The Big Budget
CBS
Transcript
everybody it was a wide ranging news conference with the president selling his new $ three5 trillion doll budget and arguing that his economic plan is already showing signs of progress there are no quick fixes and there are no silver bullets that's why we've put in place a comprehensive strategy designed to attack this crisis on all fronts it's a strategy to create jobs to help responsible homeowners to restart lending and to grow our economy over the long term and we're beginning to see signs of progress the budget I submitted to Congress will build our economic recovery on a stronger foundation so that we don't face another crisis like this 10 or 20 years from now that's why this budget is inseparable from this recovery because it is what lays the foundation for a secure and Lasting Prosperity we'll recover from this recession but it will take time it will take patience it will take an understanding that when we all work together when each of us looks beyond our own short-term interest to The Wider set of obligations we have towards each other that's when we succeed that's when we prosper and that's what is needed right now last week you said quote I didn't run for president to pass on our problems to the Next Generation but under your budget the uh debt will increase $7 trillion over the next 10 years the Congressional budget office says 9.3 trillion isn't that kind of debt exactly what you were talking about when you said passing on our problems to the Next Generation the main difference between uh the budget that we presented and the budget that came out of the Congressional budget office is assumptions about growth they're assuming a growth rate of 2.2 we're assuming a growth rate of 2.6 those small differences end up adding up to a lot of money none of us know exactly what's going to happen six or eight or 10 years from now here's what I do know if we don't tackle energy if we don't improve our education system if we don't drive down the costs of healthcare if we're not making serious investments in science and technology and our infrastructure then we won't grow 2.6% we won't grow 2.2% we won't grow and so what we've said is let's make the Investments That ensure that we meet our growth targets that put us on a pathway to growth uh as opposed to a situation in which we're not making those Investments and we still have trillion dollar deficits the sales job continues tomorrow the president goes to Capitol Hill where he meets with Senate Democrats and will try to convince them that his budget is the way to keep the country on the path to recovery chip Reed CBS News the White House
From Recession To Recovery
CBS News
Transcript
I want to give everyone who's watching tonight an update on the steps we're taking to move this economy from recession to recovery and ultimately to prosperity it's important to remember that this crisis didn't happen overnight and it didn't result from any one action or decision it took many years and many failures to lead us here and it will take many months and many different solutions to lead us out there are no quick fixes and there are no silver bullets that's why we put in place a comprehensive strategy designed to attack this crisis on all fronts it's a strategy to create jobs to help responsible homeowners to restart lending and to grow our economy over the long term and we're beginning to see signs of progress the first step we took was to pass a recovery plan to jumpstart job creation and put money in people's pockets this plan's already saved the jobs of teachers and police officers it's creating construction jobs to rebuild roads and bridges and yesterday I met with a man whose company is reopening a factory outside of Pittsburgh that's rehiring workers to build some of the most energy efficient windows in the world and this plan will provide a tax cut to 95% of all working families that will appear in people's paychecks by April 1st the second step we took was to launch a plan to stabilize the housing market and help responsible homeowners stay in their homes this plans one reason that mortgage interest rates are now at near historic lows we've already seen a j jump in refinancing those of mortgages as homeowners take advantage of lower rates and every American should know that up to 40% of all mortgages are now eligible for refinancing this is the equivalent of another tax cut and we're also beginning to see signs of increased sales and stabilizing home prices for the first time in a very long time the third part of our strategy is to restart the flow of credit to families and businesses to that end we've launched a program designed to support the markets for more afford auto loans student loans and small business loans a program that's already securitized more of this lending in the last week than in the last four months combined yesterday secretary gner announced a new plan that will partner government Resources with private investment to buy up the assets that are preventing our banks from lending money and we will continue to do whatever is necessary in the weeks ahead to ensure the banks Americans depend on have the money they need to lend even if the economy gets worse finally the most critical part of our strategy is to ensure that we do not return to an economic cycle of bubble and bust in this country we know that an economy built on Reckless speculation inflated home prices and maxed out credit cards does not create lasting wealth it creates the illusion of prosperity and it's endangered us all the budget I submitted to Congress will build our economic recovery on a stronger foundation so that we don't face another crisis like this this 10 or 20 years from now we invest in the renewable sources of energy that will lead to new jobs new businesses and less dependence on foreign oil we invest in our schools and our teachers so that our children have the skills they need to compete with any workers in the world we invest in reform that will bring down the cost of healthare for families businesses and our government and in this budget we have we have to make the tough choices necessary to cut our deficit in half by the end of my first term even under the most pessimistic estimates at the end of the day the best way to bring our deficit down in the long run is not with a budget that continues the very same policies that have led us to a narrow prosperity and massive debt it's with a budget that leads to Broad economic growth by moving from an era of borrow and spend to one where we save and invest and that's why clean energy jobs and businesses will do all across America that's what a highly skilled Workforce can do all across America that's what an effici healthare system that controls costs and entitlements like Medicare and Medicaid will do that's why this budget is inseparable from this recovery because it is what lays the foundation for a secure and Lasting Prosperity the road to that Prosperity is still long and we will hit our share of bumps and setbacks before it ends but we must remember that we can get there if we travel that road as one nation as one people you there was a lot of outrage in finger pointing last week and much of it is understandable I'm as angry as anybody about those bonuses that went to some of the very same individuals who brought our financial system to its knes partly because it's yet another symptom of the culture that led us to this point but one of the most important lessons to learn from this crisis is that our economy only works if we recognize that we're all in this together that we all have responsibilities to each other and to our country bankers and Executives on Wall Street need to realize that enriching themselves on the taxpayers dime is inexcusable that the days of outsized rewards and Reckless speculation that puts us all at risk have to be over at the same time the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit that drive is what has always fueled our prosperity and it is what will ultimately get these Banks lending and our economy moving once more we'll recover from this recession but it will take time it will take patience and it will take an understanding that when we all work together when each of us looks beyond our own short-term interest to The Wider set of obligations we have towards each other that's when we succeed that's when we prosper and that's what is needed right now so let's look towards the future with a renewed sense of common purpose A Renewed determination and most importantly A Renewed confidence that a better day will come
Geithner, Bernanke & Congress
CBS News
Transcript
the country's two top moneymen urged Congress today to give the treasury Department sweeping new regulatory power that goes beyond Banks to other troubled financial institutions AIG highlights very broad failures of our financial system the FED share argued if the government had had the power to take over AIG this bonus issue would not have Arisen because all the contracts could have been uh adjusted by the conservator Bernan and treasury secretary Tim gner both testified they only learned the details of aig's huge retention bonuses in early March banki said he considered suing to get the money back but legal staff counsel against this action on the grounds that Connecticut Law provides for substantial punitive damages if the suit would fail but today the Connecticut attorney general disagreed and said If the Fed had called we would have given the green light to sue members wanted to know how they plan to prevent future bonus payouts one one Democrat even demanded a chart of every executive at tarp funed companies who makes more than a million a year are you going to give us the chart or you going to hide the ball I'm not I'm not going to hide the ball are you going to give us the chart I will reflect on the suggestion you made and see if that is a reason in other words you won't commit it wasn't the only time tempers flared is your chief of staff from Gman tax my chief of staff uh who is a just tell me I don't have much time gner was grilled about his new plan to partner with private investors to buy toxic assets I think you gentlemen a a well-intended intelligent men who are trying to save the economy I think your motivations are fine I just think you're dead wrong on this one but gner pleaded with the members to give treasury efforts time Congress said this plan will work you can see interest rates come down in ways that that benefit uh small businesses Working Families across the country we just need to keep at it gner warned he may have to come back to Capitol Hill to asked for billions more in bailout funds though he acknowledged that public support for these big rescue plans may be waning especially in the wake of that AIG bonus debacle Katie Nancy ctis on Capitol Hill Nancy thank you
Lawmakers angry over AIG
CNN
Transcript
I share the anger and frustration of the American people not just about the compensation practice at AIG and in other parts of our system, but that our financial system permitted a scale of risk taking that has caused grave damage to the lives of so many Americans. I know that much of the public anger has fallen on Mr. Liddy, but this is not fair. Mr. Liddy did not create this mess. He did not seek this job. He agreed in response to a request by the government of the United States to work to restructure the company and help us get back the assistance provided by the taxpayer. And in taking on what I think is the most challenging job in the American financial system today, he inherited an enormous range of problems, including these retention contracts that are the understandable source of public outrage. At best, the consequences of AIG's failure would have been a significant intensification of an already severe financial crisis and a further increase in the cost of the financial system. The AIG's failure was a result of a global economic crisis that was a result of a global economic crisis that was a result of a global economic crisis that was a result of a global
Obama pressed on AIG
CNN
Transcript
Mr. President, you spoke again at the top about your anger about AIG. You've been saying that for days now. But why is it that it seems Andrew Cuomo seems to be in New York getting more actual action on it? And when you and Secretary Geithner first learned about this ten days, two weeks ago, you didn't go public immediately with that outrage. You waited a few days, and then you went public after you realized Secretary Geithner really had no legal avenue to stop it. And more broadly, I just want to follow up on Chip and Jake. You've been very critical of President Bush doubling the national debt. And to be fair, it's not just Republicans hitting you. Democrat Ken Conrad, as you know, said, quote, when I look at this budget, I see the debt doubling again. You keep saying that you've inherited a big fiscal mess. Do you worry, though, that your daughters, not to mention the next president, will be inheriting an even bigger fiscal mess if the spending goes out of control? SECRETARY KERRY GILMORE Of course I do, Ed, which is why we're doing everything we can to reduce that deficit. Look, if this were easy, then we would have already had it done and the budget would have been voted on and everybody could go home. This is hard. And the reason it's hard is because we've accumulated a structural deficit that's going to take a long time, and we're not going to be able to do it next year or the year after or three years from now. What we have to do is bend the curve on these deficits. SECRETARY KERRY GILMORE I'm sorry.
Dow surges 500 on Treasury asset plan; home resales jump 5%
CBS News
Transcript
the stock market had its best day of the year the Dow rocketed to a gain of nearly 500 points the NASDAQ soared almost 100 it was a big nod of approval for the treasury Department's announcement of a more detailed strategy for unfreezing the credit Market President Obama called the plan a critical element in recovering from the nation's recession it calls for teaming up the government with private investors to buy troubled assets as much as a trillion dollars worth that way the banks will have more money to lend to Consumers the government hopes at least some of those consumers will invest in new homes and today there has been good news on that front bargain prices are already drawing in a fresh wave of buyers sales of pre-owned homes jumped by more than 5% last month the biggest increase in nearly six years and nearly half of the sales were to firsttime home buyers no such luck in the jewelry market Tiffany reported a 75% drop in quarterly profit dragged down by weak holiday sales the company is reducing its worldwide staff by about 10 10% but still predicts disappointing results through the rest of the year that's your money watch log on to cbsnews.com for more in New York I'm Alexis christopherus