“The Most Dangerous Credit Card in the History of the World”

By Michael Ruhl, University of New Mexico – Talk Radio News Service

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House Minority Leader John Boehner (R-Ohio)
Photo by Michael Ruhl

House Minority Leader John Boehner (R-Ohio) called congressional voting cards “the most dangerous credit card in the history of the world”, because then enable Congress and the president to engage in reckless spending. This was not Boehner's first criticism of Obama, but his statement came on the 101st day of the Obama Administration, a time which Boehner has criticized as being pock marked with excessive borrowing, reckless spending and a massive growth in government.

Boehner said that Democrat’s “record on spending and debt is staggering, but our economy is growing weaker, and it’s not going to get any better by growing the size of the government here in Washington.”

Boehner believes that the Democratically controlled Congress has enabled and contributed to the recklessness, and thinks it is up to the Republicans to put a stop to it. Republicans must be “the party of better solutions” if they are going to stand up to the Democrats in Congress, Boehner said, adding that he hopes Democrats will be committed to a bipartisan policy approach..

Citing the elections of 2008, Boehner said “out brand has been tarnished”, but to help the party serve the American people, Republicans must stand up to the Obama Administration when disagreements arise, and to offer alternative solutions.

Leader Boehner applauded President Obama on his strategy towards Afghanistan and Iraq, but showed concern at Obama’s greater national security policy.

“The big question continues to be: what is the Administration’s overarching plan to fight terrorism? Judging from their recent decision to release 30 terrorist detainees with no plan on where to put them, it continues to beg the question,” referring to Obama’s closure of the Guantanamo Bay detention center without knowing where the detainees will be sent.

Budget Battle Continues

By Suzia van Swol-University of New Mexico, Talk Radio News Service
About a week after President Obama presented his budget to congress, House Republicans and Democrats continue with aggressive tactics. Republicans say the budget will leave the country with staggering debt through reckless spending.

House Minority Leader John Boehner (R-Ohio) called the budget “staggering,” adding that such widespread spending will be put at the expense of future generations of Americans. Boehner’s comments that the country has had to tighten it’s belt everywhere except in Washington echoes sentiments made by critics of the budget presented to Congress by the President.

“I think it is wrong to deal with these challenges by mortgaging the future of our children and grandchildren,” Boehner said. The proposed budget backed by Democrats “makes the economy worse and will destroy more American jobs,” will double U.S. debt over the next five years and triple economic debt in ten years, he said.

On Wednesday, Wisconsin Congressman Paul Ryan (R), who is the ranking member of the House Budget Committee, introduced a budget solution he says will curb spending, create jobs and leave the U.S. with $3.6 trillion less debt than the Democrats’ proposed budget.

Boehner does not support Democrats plan to raise energy taxes in the middle of a recession and said that it could cost every family as much as $3,100 a year in additional energy costs. “Think of the millions of American jobs that are dependent on a lot of energy use,” said Boehner. When asked if there is the possibility for a compromise, Boehner said “Oh yeah, I’m only for losing one million jobs, or I’m only willing to raise taxes on people $2,000 a family...No there is no compromise!”

In the middle of a recession, Congress cannot “throw a wet blanket on a weak economy, you’ll smother it,” Boehner said.

Toxic Asset Relief Program (TARP), allows the United States Department of the Treasury to purchase or insure up to $700 billion of "troubled" assets. “It’s just out of control,” said Boehner. No one has any idea where the money is going, how much is left, or where it went and the American people have a right to know where this money is going, stated Boehner.

Thousands of Americans lost their jobs in January; responding to questions regarding Congress making sacrifices by perhaps taking a pay cut, Boehner replied only that, “I understand.”

Geithner, Bernanke & Dudley defend AIG

by Christina Lovato, University of New Mexico-Talk Radio News Service


“This is an extraordinary time and the government has been forced to take extraordinary measures. We will do what is necessary to stabilize the financial system, and with the help of Congress, develop the tools that we need to make our economy more resilient and our system more just,” said Treasury Secretary Timothy F. Geithner at a House Committee on Financial Services hearing.

Today, William Dudley, the President and Chief Executive Officer of the Federal Reserve Bank of New York along with Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System and Treasury Secretary Timothy F. Geithner testified in front of Congress and were hammered with questions regarding the American International Group, Inc. (AIG), a company at the center of the economic crisis.

Bernanke said that the Federal Reserve along with the Treasury made their decision to lend $85 billion to AIG in September 2008 because they agreed that AIG’s failure under the conditions then prevailing would have posed unacceptable risks for the global financial system and for the economy. “Global financial markets were experiencing unprecedented strains and a worldwide loss of confidence.... At that time, no federal entity could provide capital to stabilize AIG and no federal or state entity outside of a bankruptcy court could wind down AIG,” said Bernanke. When it came time to talk about AIG’s payout of retention bonuses to employees at AIG’s Financial Products Unit (FP), Bernanke stated, “It was highly inappropriate to pay out substantial bonuses to employees of the division that had been the primary source of AIG’s collapse.... I asked that the AIG-FP payments be stopped but was informed that they were mandated by contracts agreed to before the government’s intervention.”

Dudley stated that he believes AIG’s Chief Executive Officer, Edward Liddy, weighed a number of factors in when deciding not to attempt to prevent payment of retention awards owed to AIG-FP employees. Dudley said that the factors include “the likely negative effects of disruption in staffing at FP in managing its multi-billion dollar exposures, legal advice that the contracts were valid, meaning that breaking them would likely increase the amount of company funds ultimately paid to the covered employees and the negative consequences to AIG’s business that could result from the public abrogation of these contracts.”

Geithner said that the Treasury is working to promulgate rules and to develop a program under the original TARP legislation to review certain bonus awards already paid. Geithner stated, “The proposed resolution authority would allow the government to provide financial assistance to make loans to an institution, to purchase its obligations or assets, to assume or guarantee its liabilities, and purchase an equity interest.... This proposed legislation would fill a significant void in the current financial services regulatory structure in respect to non-bank financial institutions. Implementation would be modeled on the resolution authority that the FDIC has under current law with respect to banks.” Geithner concluded the hearing by saying, “This plan will work. This plan because of the authority provided by the Congress, not just of the Treasury, but the fed, gives us broad ability to do what you need to get through a financial crisis like this.”

Who is responsible for TARP oversight?

The House Ways and Means Committee met today to discuss oversight of the Troubled Asset Relief Program (TARP), a program which altogether will commit almost 3 trillion dollars in assistance to failing private companies. The lack of oversight of this program has become apparent with recent bonuses paid to executives of large corporations such as AIG. Two witnesses testified: Neil Barofsky, Special Inspector General of the Troubled Asset Relief Program (SIGTARP), and Gene Dodaro, Acting Comptroller General of the U.S. Government Accountability Office. Three officers from the Treasury were invited, but were not in attendance.

In his opening remarks, Congressman Reichert (R-WA) summarized TARP’s problematic nature, “There is no clear plan and no consistent application of the program. Those involved have no idea if, how, or when TARP will change... or change again.... The complete lack of transparency in TARP has produced a credibility crisis that undermines the very confidence it was meant to restore.” Reichert went on to outline two points which must be clarified in order to restore confidence in TARP: “(1) exactly how TARP money is being spent and (2) what specific metrics Treasury will use to measure the effectiveness of the program.”

Barofsky explained the responsibilities of SIGTARP, “To oversee this vast amount of money for the American taxpayer, I focus on three different areas: transparency, oversight, and enforcement.” In December, he requested that the Treasury put all TARP agreements on its website; the top 20 agreements were finally posted by the Treasury this morning. SIGTARP is the only oversight body which has the authority for criminal law enforcement. Of this responsibility, Barofsky stated, “This is one of our most important functions and we are meeting this unprecedented challenge head-on... When we detect fraud, rest assured, we will investigate the matter and bring any fraudster to justice.”

Dodaro presented the results to the Committee of both 60 day reports which the Government Accountability Office has produced since TARP’s inception. Each report gave recommendations to the Treasury, Dodaro explained. “First, monitoring and tracking the use of the money and making sure Treasury had an oversight process in place to monitor compliance with the legislative provisions... We believe you ought to have data collected on a monthly basis for any institution receiving Troubled Asset Relief Programs. And they’re beginning to now, recently, move in that direction.”

When asked if their agencies have the resources necessary to be effective, Barofsky responded, “We’re building. We don’t have the necessary resources yet. Pending right now in the House is HR 1341 which would give us some expanded hiring authority which will help us... We’ve had some serious challenges.”

Congressman Pascrell (D-NJ) expressed frustration with the Treasury Department. “I am deeply disappointed that the Treasury Secretary right now, Mr. Geithner, has not taken a more aggressive approach to remedy the mismanagement of these TARP funds by the last administration. And I’m stunned by the current Treasury and I’m offended by their obstinacy and the fact that they’re not here today, when they were requested to be here three times.”

Barofsky announced a plan to audit the Treasury to find out precisely “who knew what when and why” regarding AIG’s use of TARP funds. As of this morning, neither Barofsky nor Dodaro could say whom, if anyone, in the Treasury was aware of AIG’s misuse of this money.

Today at Talk Radio News

The Washington Bureau is covering The House Oversight and Reform Committee hearing on "Preventing Stimulus Waste and Fraud: Who Are the Watchdogs?", Speaker of the House Nancy Pelosi's (D-Calif.) weekly press conference, and the Save Darfur Coalition.

Talk Radio News is also covering the House Ways and Means Committee Oversight Subcommittee hearing on the "Troubled Asset Relief Program: Oversight of Federal Borrowing and the Use of Federal Monies," the U.S.-Mexico Chamber of Commerce (USMCOC) 13th Annual U.S.-Mexico Border Issues conference, and the Center for American Progress (CAP) discussion on "Sustainable Security in Afghanistan Requires Sweeping U.S. Policy Overhaul."