Administration Officials Tout New Report On Status Of Medicare

The Democrats’ sweeping healthcare reform law will extend the life of the Medicare hospital insurance fund by 12 years, according to a new government report on the status of Medicare and Social Security.

According to U.S. Treasury Secretary Tim Geithner, the nation’s Medicare trust fund should stay solvent until 2029. In addition, the healthcare overhaul, passed earlier this year, improves the long-term outlook for the Social Security trust fund, which analysts previously warned will be depleted by 2037. In 2010, Social Security expenditures will exceed receipts for the first time in more than 25 years.

While the short-term prognosis for the two big entitlements is slightly troublesome, Geithner said the Medicare figures are encouraging.

“These are very, very substantial improvements,” he said during a briefing on Thursday.

U.S. Health and Human Services Secretary Kathleen Sebelius added that the “outlook for Medicare has improved greatly,” as a result of the new healthcare law.

Sebelius, however, said that Congress must work on finding a permanent solution to the way in which physicians that accept Medicare are reimbursed by the federal government. Congress recently extended the “doc-fix” as it is known, but officials from the Centers for Medicare and Medicaid Services (CMS) have concluded that continued temporary fixes will in the long run negate some of the savings produced by the Affordable Care Act.

Housing Market Will Face Reforms Within Months, Says Treasury Secretary Geithner

By Benny Martinez - University of New Mexico/Talk Radio News Service

Treasury Secretary Timothy Geithner told the House Financial Services Committee that reforms to the housing finance system should come within months, not years.

Geithner said that changes are necessary to stabilize the housing market and added that a number of proposals have already been put forth as part of financial regulatory reform.

Reform to the two major government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, must expand to the reform of broader housing policies, according to Geithner.

“Any restructuring of Fannie Mae or Freddie Mac is part of the reform of the wider housing finance system,” Getihner said.

The Treasury Department and the Obama administration intend on developing a comprehensive reform plan for delivery to Congress in the coming months. A list of questions to acquire input from all stakeholders will be submitted by April 15, 2010.

Geithner said that the administration “will seek to work closely with the Congress, on a bipartisan basis, prior to finalizing a comprehensive reform plan.”

$700 billion will give you something

“If you spend $700 billion you going to get something for it,” said Dean Baker co-Director of the Center for Economic and Policy Research in Washington DC, at a discussion on "Dissecting the Package-How Will the Markets and the Economy Respond?” at the National Press Club. The panelist discussion focused on the economic consequences of the bailout bill and what it will mean to America’s future budget.

Martin Baily, former chairman of the Council of Economic Advisers during the Clinton administration, highlighted the fact that the current lack of credit availability is affecting business and households as well. “ The collapse of house prices has lead to a collapse in construction,” Baily said.

Baker was optimistic about the current economic situation, saying America will get through the immediate crisis even if it’s not going to be easy. “... At the end of the day the Fed and Treasury have enough duck-tape to keep things going,” Baker said. He rejected the possibility of the current crisis ending up being another Great Depression, as a “long-headed”. “We are not going to have the Great Depression, that would take a lot of really bad policies over a long period of time,” Baker said. The correct way, the efficient way to do a bailout would have been direct injection of capital,”.

White House Briefing

Following the president's statement in the Rose Garden, White House spokeswoman Dana Perino and Director of the National Economic Council briefed the press on the government's increasing role in attempting to restore investor confidence to the struggling financial markets.

Hennessey outlined the steps that have been taken and those that the government would like to happen, "So we've got the conservatorship for Fannie and Freddie. Treasury and Fed worked over the last weekend, they were up in New York working with firms in the industry," he said. "We had the Fed taking steps just a couple days ago to prevent what they would call the disorderly liquidation of AIG, the insurance company. And then the Fed has been increasing significant amounts of liquidity into the financial system to keep things moving."

Hennessey reiterated statements made by President Bush about urging the Congress to pass legislation that would allow the federal government to buy illiquid assets from struggling financial institutions to further increase liquidity.

"The most obvious example of an illiquid asset is a mortgage asset, a mortgage-backed security that's probably lost value as the values of the homes that are underlying those mortgages have declined," he said. "And what's happening is, as those assets have lost value, people don't want to buy them, they become illiquid, it's hard for people to buy and sell them, and so they're stuck on the balance sheets of financial institutions."

Hennessey said that the White House would be in negotiation with congressional leaders over the weekend. Congress and the administration will need to hammer out the details of this authorizing legislation. Hennessey said that they would have to make "significant, substantive progress on the details" over the weekend.

"This is a very bold set of actions, we are calling on Congress to do something that is very big and that we believe needs to be done quickly," he said.