Reid: Financial Reform Could Hit Senate Floor By Next Week

By Laurel Brishel Prichard University of New Mexico/ Talk Radio News Service

Senate Majority Leader Harry Reid (D-Nev.) told reporters Thursday that he is pushing to get a full financial reform bill onto the Senate floor as early as next week.

Reid, along with Senate Majority Whip Dick Durbin (D-IL), Sen. Patty Murray (D-WA) and Sen. Charles Schumer (D-NY) stressed that reform of the nation's financial system would not only protect the taxpayers, but make sure that institutions would not become “too big too fail”.

“[Republicans] seem clearly focused on protecting these big banks,” said Reid “It’s as simple as this: if you want a financial system that allows banks to become too big to fail, puts your retirement security in jeopardy and leaves consumers vulnerable to excessive risk, then you should support the Republican plan.”

The legislation would put in place a better regulatory oversight program to prevent the financial system from triggering another recession.

“Everyone agrees that our regulatory [system] is broken down,” said Schumer.

Schumer added that Republican warnings that the reform plan fails to act as a safeguard against future bailouts is unfounded. According to the New York Senator, the money that would go for any future bailout of a large institution would have to come from the institution itself, and not the taxpayers.

Hoyer: PAYGO Is Key To Economic Recovery

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

House Majority Leader Steny Hoyer (D-Md.) said Monday that following the rules of PAYGO is crucial to keeping the U.S. from falling even further into debt.

In a speech given at the Brookings Institute in Washington, D.C., Hoyer discussed various fiscal responsibilities of the Obama administration, and said programs like PAYGO "are essential, but they are not enough."

The Majority Leader applauded President Barack Obama for creating a bipartisan fiscal commission and appointing former White House Chief of Staff Erksine Bowles and ex-Senator Alan Simpson (R-Wyo.) to chair it.

"Given the seriousness of our situation, the commission must come to a consensus, and Congress must act on its proposals at the end of the year," Hoyer said.

Hoyer attributed the success of PAYGO to its role in creating a projected economic surplus during the Clinton administration. Hoyer also recognized that the decision by the Bush administration to abandon PAYGO "paved the way for record borrowing and threw us back in the red."

Hoyer said that he remains confident that the character of the U.S. will serve as the backbone of economic recovery, but reminded those in attendance that it will not happen overnight.

"It will take bipartisan trust, presidential leadership and public spirit," Hoyer said. "If we are unable to raise our heads even for a moment above the daily partisan fight, if the collapse comes, we will deserve it."

"The Great Recession" Has Ended, Says Economist

By Laurel Brishel Prichard - University of New Mexico/Talk Radio News Service

“The recession is over,” said Dr. Mark Zandi, Chief Economist of MoodysEconomy.com, Monday afternoon at the National Governors Association’s winter meeting. The closing plenary statements were hopeful in regards to the economy and the increase in jobs.

The economy has begun to grow and the loss of jobs should end after one more month, according to Zandi. The increase of the Gross Domestic Product by four percent in the second half of 2009 will act as a gateway to not only more jobs, but the continued stabilization of the economy as a whole, he added.

“The coast is not clear, at least not yet,” said Zandi with regards to the economic standing.

While the tide is slowly starting to turn with the job market, there is still a lot of work to be done in terms of the housing market, which is a major factor in our nation's economic standing, said Zandi.

The housing market will take much longer to rebound in comparison to the job market. The amount of foreclosures that have recently flowed into the real estate market will be what keeps the housing market depressed and what keeps local tax revenue constrained, Zandi said.

“Even when we are on the other side of this great recession...when the economy is growing again your troubles will not go away,” said Zandi to the panel of Governors on the issue of state and local revenue growth.

U.S. Not Out Of The Woods Yet, Says Economist

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

In his State of the Union address on Wednesday, President Barack Obama said, “The worst of the storm has passed.” But according to Chief Economist of Moody’s Corporation Mark Zandi, the country remains at high risk of revisiting a recessionary period.

Evidence of a 5.7 percent increase in the nation’s Gross Domestic Product (GDP) proves that the “Great Recession” is over, Zandi said on Friday. He applauded and credited policy initiatives produced by Federal Reserve Chariman Ben Bernanke.

According to Zandi, the President’s 2009 stimulus package pumped billions of dollars into the economy and is partly responsible for its recent growth. It is evident now, however, that the stimulus package will eventually become an opposing force against efforts to expand the efficiency of the economy, Zandi said.

Although signs of economic expansion are evident, Zandi admitted that the country is still susceptible to falling back into a recession.

“The recovery is fragile,” Zandi said. “I don’t think that the coast is clear, I don’t think there is any guarantee that the recovery is going to evolve into a self-sustaining economic expansion...there are high odds [indicating] that it won’t.”

Zandi blamed the high-risk situation on the nation's ten percent unemployment rate for the U.S., saying that without net job creation, the country will not have the income growth to support consumer spending. He said that small business expansion will serve as the backbone for this effort and applauded the President for initiating tax breaks for those businesses.

Bernanke Says Recession Is Through

Leah Valencia, University of New Mexico-Talk Radio News Service

Federal Reserve Chairman Ben Bernanke announced the end of the recession Tuesday, but conceded that the U.S. will continue to feel its effects.

“From a technical perspective, the recession is very likely over at this point," he said. “[But] it is still going to feel like a very weak economy for some time,” said Bernanke during a speech at the Brookings Institute.

Bernanke warned that though the U.S. is leaving the recession behind, unemployment and low wages will continue to take their toll. He added that markets will remain weak through 2010, because economic growth will not be strong enough to create jobs.

“Unemployment will be slow to come down,” he said. “It will come down, but it may take some time.”

The bankruptcy of the Lehman Brothers occured exactly a year before Bernanke’s speech on Tuesday, marking the worst phase of the global financial crisis.

Bernanke said regulatory reform is needed to ensure that a crisis such as this does not reoccur.

“This has just been too big of a calamity and too serious of a problem.”

President Barack Obama delivered a similar message during a street to New York's financial community Monday.

While there has been some debate among policymakers over whether effective regulatory reform can make it through Congress, Bernanke remarked Tuesday that he was hopeful.

“I remain pretty optimistic that... reform will be forthcoming,” Bernanke said.