White House Will Try To Recoup Cost Of Health Reform Says Orszag

By Courtney Costello - Talk Radio News Service

The White House Office of Management and Budget Director Peter Orszag said during a conference call on Thursday that current health care costs are crowding out important domestic initiatives.

Orszag listed three elements that would help major manufacturers and major businesses prevent their health care costs from growing over time. He suggested a digitized health care system, more information on what works and what does not work, and better incentives for providers. He also explained the Administration’s development of an Independent Medicare Advisory Council.

“We’re putting forward this, what we’re calling the IMAC, Independent Medicare Advisory Council, so that policy can more easily keep up with changes in the health system and we can tweak and refine changes in the payment system overtime as we’re learning what works and what doesn’t with regard to that aspect of health care,” said Orszag.

The White House has proposed that 750 billion to 1 trillion dollars be spent over the next ten years to provide insurance to those who aren't covered and to those who cannot afford their current care, said Orzag.

In addition to separate Medicare and Medicaid revenue proposals that would net close to 600 billion dollars, Orszag said the White House has proposed limiting itemized deductions, the rate at which high income tax payers can itemize the deductions they claim on their tax returns, for wealthy Americans.

He argued that this proposal would provide an additional 300 billion dollars or more to cover the cost of reform.

TARP Has Made Progress Says Treasury Official

By Mariko Lamb, Talk Radio News Service

Assistant Treasury Secretary for Financial Stability Herbert Allison, Jr. said that the Troubled Asset Relief Program (TARP) has been “key to stabilizing the financial system and preventing greater deterioration in the availability of credit,” in his testimony to the House Oversight and Investigations Subcommittee Wednesday.

“There’s also signs that the economy is beginning to mend,” he said. Indications of economic stabilization include an increase in the issuance of corporate debt, increase in consumer confidence, and higher housing starts.

Despite these improvements, “Our financial system and our economy remain vulnerable,” he said, as unemployment and home foreclosures remain high and strains in the commercial real estate market continue to build. “This is why Treasury must remain vigilant and press ahead with our financial stabilization efforts,” he said.

Allison attempted to assure members of the subcommittee that taxpayers can put their trust in the Treasury, and that the agency is dedicated to high standards of transparency.

“We feel a great obligation as responsible stewards of their money,” he said, assuring those at the hearing that the Treasury is committing every effort to ensuring an ample return for taxpayers.

“I will regularly update Congress on our progress. We have productive, working relationships with our four oversight bodies--Special Inspector General of the TARP, Government Accountability Office, Congressional Oversight Panel, and Financial Stability Oversight Board,” he said.

Information on lending activities of Treasury-invested banks can be found at www.financialstability.gov.

Bernanke: Financial System Strained But Undergoing Stabilization

By Courtney Ann Jackson- Talk Radio News Service

Financial conditions are strained but have improved, according to the Federal Reserve Chairman Ben Bernanke's semiannual Monetary Policy Report to Congress.

“Today, financial conditions remained stressed, and many households and businesses are finding credit difficult to obtain. Nevertheless, on net, the past few months have seen some notable improvements,” Bernanke said Wednesday before the Senate Committee on Banking, Housing, and Urban Affairs.

Bernanke cited the narrowing spread of interest rates in short-term money markets, adding that equity prices are nearly beginning to recover to their levels from the end of last year. Bernanke also noted that the banks have raised “significant amounts of new capital.”

According to the Chairman, many of these improvements are due, in part, to policy actions by the Federal Reserve to encourage the flow of credit.

“Some banks are still short of capital, other banks are concerned about future losses, they’re concerned about the weakness in the economy and the weakness of potential borrowers,” said Bernanke. “Banks should be making loans to credit-worthy borrowers. It’s in their interest, the bank’s interest, as well as the interest of the economy and we’re working with banks to make sure they do that.”

During questioning, Bernanke explained to Committee members that consumer protection, transparency, and accountability continued to be priorities for the Federal Reserve.

“The American Economy Is Again Progressing,” Says President’s Economic Advisor

By Mariko Lamb-Talk Radio News Service

Lawrence Summers, Director of the National Economic Council and Assistant to the President for Economic Policy, discussed the progress that the Obama administration has made thus far in economic recovery and voiced his confidence that the U.S. will be able to overcome the current economic challenges.

“Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago,” Summers said.

He reported that “many private forecasters expect to see positive growth in the second half of this year.” Additionally, reports have indicated improved consumer and business sentiment, a 33% decrease in investment grade corporate bonds, and a slower pace of GDP contraction.

A slight pause in Summers’ optimism ensued upon the mention of the high unemployment rate facing the U.S. “Unemployment is substantially higher and job loss has been greater than most observers predicted last winter...unemployment is likely to rise in coming months,” he admitted.

He claimed, however, that although the high unemployment rate is a significant problem, it “does not provide a basis for concluding that the Recovery Act is falling short of its goals.” He advised Americans to be patient since the “peak impact of the stimulus on jobs” is not projected to be achieved until the end of this year.

"While unemployment continues to contract, the available indicators suggest that GDP is on close to a level path with prospects for positive growth to commence during this year,” Summers concluded.

Frank Unveils Plan To Bailout Main Street

By Joseph Russell- Talk Radio News Service

Rep. Barney Frank (D-Mass.) introduced the “TARP for Main Street Act of 2009” during a House Financial Services Committee meeting Thursday. The legislation is designed to use money made available under the Troubled Assets Relief Program, to help struggling homeowners and neighborhoods as the economy worsens.

Frank said “the program is one where money is provided to communities to buy-up property that was foreclosed.”

However, committee Republicans said that the program will continue to add to the massive national deficit. They also criticized the plan because it circumvents the appropriation process by taking $6.2 billion directly from the general fund, a procedure they say violates the Constitution.

“There seems to be a competition by Democrats, especially in this committee, who can come up with the most outlandish way to spend tax payer’s dollars,” Rep. Scott Garrett (R-N.J.) said. “The current proposal is to take the TARP program and turn it into something of a Madoff like Ponzi scheme.”

Frank plans to fund “TARP for Main Street” with money that was originally appropriated for bank bailouts. Some $68 billion has been given back by banks who did not need the money. Frank believes the money should be “recycled” and given to struggling homeowners.

TARP originally appropriated $700 billion in emergency bailouts as a measure to stabilize the financial markets.