White House defends Geithner. The White House defended Treasury Secretary Timothy Geithner after he came under fire during a hearing yesterday. CNBC's Steve Liesman reports.
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Pres. Obama takes friendly fire on US Economy
The health care debate has sucked so much oxygen out of the Capitol's chambers that it's been easy to miss another simmering story: Democratic fears about the economy.
That pot has finally boiled over, with black caucus members walking out of a Barney Frank financial markup, liberals and conservatives calling for Treasury Secretary Timothy Geithner to resign and a policy victory for none other than Ron Paul on his "audit the Fed" proposal.
The tensions show why Democrats want to get the health care debate done as soon as possible — they can then spend much more of 2010, an election year, on jobs and economic reforms.
The wave of Democratic grief had been building privately for months, but Hill Democrats had held back on publicly criticizing the Obama presidency. But now, Democrats who see that their economic agenda seems to be flailing and fear getting wiped out in the 2010 congressional elections are going public with a burst of criticism, and much of it has poured out in the past 48 hours.
It’s coming from some of the most liberal supporters of the president, like John Conyers, who said Thursday on the Bill Press radio show that President Barack Obama was “bowing down” to the right.
"I'm getting tired of saving Obama's can in the White House," Conyers said. "I mean, he only won by five votes in the House, and this bill wasn't anything to write home about."
Oregon Democrat Peter DeFazio, who has called on Geithner to resign, vented his frustrations about the Obama economic team in an interview with POLITICO.
“I don’t see any trace of life coming out of these people when it comes to the real economy,” DeFazio said. “That’s not their orientation.”
White House officials defended their approach — and stood up for Geithner, in particular. “Secretary Geithner has helped steer the American economy back from the brink, and is now leading the effort on financial reform,” said spokeswoman Jen Psaki. “His focus — and ours — is on economic recovery and addressing the challenges the American people face every day. We invite anyone with good ideas, whether they agree with us or not, to be a part of the productive effort toward a solution.”
Many Obama supporters on the Hill, however, aren’t feeling particularly cooperative at the moment when it comes to economic policy. For months, Democratic aides and lawmakers had been complaining privately — a common theme was that the White House is constantly asking Democrats in Congress to “walk the plank” and take tough votes on politically toxic issues like cap and trade or the public option, while the White House plays it cool and avoids taking hard public stands.
Geithner was under fire from the right and the left all week, and Republicans at a Joint Economic Committee hearing Thursday called on him to resign as well. Geithner, for his part, was feisty, dropping blame on the economic crisis back on the laps of Republicans, saying, “You gave this president an economy falling off the cliff."
Rep. Jan Schakowsky, a liberal Illinois lawmaker, says she’s concerned the White House economic team has lost the common touch that was a hallmark of the Obama campaign.
“If voters don’t understand that we really are on their side and that we are the party of change and that we are going to make a real difference in their lives, that, top from bottom, the people that are working on policy have them in mind first and foremost every minute, we’re going to be in trouble in 2010,” Schakowsky said.
But the most disconcerting tensions for this White House may be hailing from the two minority caucuses in the House.
On Thursday afternoon, Financial Services Committee Chairman Barney Frank had to yank his landmark financial reform bill after members of the Congressional Black Caucus said they wouldn’t vote for it. The CBC members had no major problems with the Frank bill itself — a sweeping crackdown on Wall Street — but they withheld their votes because they feel as if African-American economic issues haven’t gotten nearly enough attention from Obama or the Democratic Congress.
Rep. Maxine Waters (D-Calif.) met with both Geithner and FDIC Chairwoman Sheila Bair earlier this week but clearly didn’t get enough traction on her priorities.
“The recession has created a unique systemic risk that threatens all parts of the African-American community, including the poor and the middle class,” Waters said after Frank had to pull his bill. “I have always been committed to addressing that risk and will continue to do so. This is a critical issue for my constituents.”
And the Congressional Hispanic Caucus let loose on Thursday regarding much tougher restrictions on illegal immigrants having access to the health insurance exchanges in the Senate health care bill, blaming White House chief of staff Rahm Emanuel for the tighter-than-expected legislative language.
“A forensic study would show it all leads back to Rahm Emanuel and the White House,” said Illinois Democratic Rep. Luis Gutierrez, a member of the Congressional Hispanic Caucus who worked with Emanuel when the president’s top aide was in the House.
A White House aide said that Gutierrez’s comments are “inaccurate,” but the fact that a Democratic loyalist in the House was ready to go public with these complaints is extraordinary.
There are three other key areas where the White House vs. Democratic Congress tensions could blow up at any moment:
• Regulating the Fed: Ron Paul has found some friends on the left for his crusade against the Federal Reserve, and passage of his "audit the Fed" amendment in the Financial Services Committee — a move that the central bank is resisting — sent the message that even Democrats don’t trust Chairman Ben Bernanke to make all the right choices on the economy.
• Bailout balance: The Obama administration wants to extend the Troubled Asset Recovery Program, which expires on Dec. 31, and would like to use $200 billion of the funding to look fiscally prudent and pay down the deficit. But worried Democrats want that money for all sorts of economic programs, including stemming foreclosures, small-business loans and a jobs bill. The issue remains unresolved.
• Small-business lending: The White House wants a $375 million small-business program extended as soon as possible, but there has been resistance from Congress. An administration official told POLITICO that “we are confident that members don’t want to go home to their districts for the holiday and inform them that there is no more funding for this vital program.”
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Sources: Politico, MSNBC, CNBC, Congressional Black Caucus, Obama Money, Wikipedia, Google Maps
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