Timothy Geithner to Paul Ryan: White House Has No ‘Definitive Solution’ to Debt Crisis…And We Don’t Want Yours

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Treasury Secretary Timothy Geithner told the House Budget Committee Thursday that President Obama’s fiscal year 2013 budget – “the most expensive in United States history” – would “put the U.S. on an ‘unsustainable’ course if enacted,” reports The Washington Free Beacon.

Geithner also told Committee chairman Paul Ryan (R-WI) that although the Obama administration doesn’t have a “definitive solution” to the debt crisis, it definitely knows it doesn’t like the Republican alternative.

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Private emails detail Obama admin involvement in cutting non-union worker pensions post-GM bailout

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What was that Obama said about NOT being involved in the everyday decisions at General Motors?

New emails obtained by The Daily Caller contradict claims by the Obama administration that the Treasury Department would avoid “intervening in the day-to-day management” of General Motors post-auto bailout.

These messages reveal that Treasury officials were involved in decision-making that led to more than 20,000 non-union workers losing their pensions. (General Motors not eager to be political talking point in 2012)

Republican Reps. Dan Burton and Mike Turner say that during the GM bailout, Treasury Secretary Timothy Geithner decided to cut pensions for salaried non-union employees at Delphi, a GM spinoff, to expedite GM’s emergence from bankruptcy.

At a Wednesday hearing, the House Oversight Committee’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending started pushing the Treasury Department for answers on the effects of the bailout and on how much of a role the department played in picking winners and losers.

The key point of the Wednesday hearing was to show that the Obama administration advised GM on how to eliminate the Delphi workers’ pensions. The evidence suggests Geithner’s team played a significant role in that process, despite claims to the contrary.

In 2009 congressional testimony, senior Obama administration official Ron Bloom said the president told the Treasury Department to stay out of the management of these companies and downplayed any administration intervention.

“From the beginning of this process, the President gave the Auto Task Force two clear directions regarding its approach to the auto restructurings,” Bloom said then. “The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.”

But the emails TheDC obtained show high-ranking Treasury Department officials, including Matthew Feldman of Treasury’s Auto Task Force, corresponding with senior GM officials on how to make certain decisions regarding who was going to win and who was going to lose.

Read entire article @ Daily Caller

 

Treasury Department quietly plans for failure to raise debt ceiling

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The White House is warning that catastrophe will strike if Congress fails to raise the limit on the national debt: With too little cash to pay creditors, the U.S. government would default. Interest rates would skyrocket. And the economic recovery would collapse.

But behind the scenes, Treasury Secretary Timothy F. Geithner has already begun juggling the books to conserve cash, draining a special account at the Federal Reserve. And with the debt forecast to hit the legal limit of $14.3 trillion in just a few weeks, he has a range of tools at his disposal, including borrowing money from a pension fund for federal workers.

Geithner also has authority to pay investors first for interest they’re owed on the debt, according to a decades-old legal opinion. A growing number of conservatives argue that by making interest payments first, the government could avoid default and the Obama administration’s predictions of economic Armageddon.

But the nation could pay a substantial price in the form of higher interest rates if it relied for long on such evasive maneuvers, the Government Accountability Office said in a recent study. And financial analysts say market confidence could be shattered if Geithner had to cut off pay to combat troops or stop writing Social Security checks — even if he never missed an interest payment.

“I think the failure to meet any commitment would be viewed by the markets as default and would be deeply unnerving,” said Robert Rubin, who, as Treasury secretary in the mid-1990s, prevented the debt from breaching the limit during the longest battle over the issue on record.

“We don’t know” what would happen in the event of default, Rubin said. “But I think it is totally irresponsible to take the risk of trying to find out.”

Markets are already uneasy about the looming battle over the debt ceiling, which promises to consume Congress when lawmakers return next week from their Easter break.

Washington Post

Federal Reserve & Timothy Geithner Fighting to Keep Its Bailout Secrets

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Well here’s an unbelievable, but true story. You just couldn’t make this stuff up.  Last week Judge Andrew Napolitano said Timothy Geithner could be indicted for this. Some of this stuff is tucked into a bill and is secret until 2018 which shows evidence of the attempted cover up. Here we have Timothy Geithner transferring money  to former Treasury Secretary Henry Paulson. Absolutely amazing isn’t it? Basically we have an instruction from the government to AIG which was about to receive $185 billion with a B , some from the government and some of it from the Federal Reserve, the largest single bailout of any government in the history of the world. There were instructions to AIG in the applications for this money that it not list truthfully the identity of all it’s creditors and specifically to not mention it’s intentions to pay some of those creditors 100 cents on the dollar for stuff that isn‘t worth the paper it‘s printed on.  The Insurance companies had recommended paying them 40 cents on the dollar. The principal creditor they wanted to keep secret from public awareness  was Goldman Sachs. What did Timothy Geithner know since he was at the time the President and CEO of the Federal Reserve of New York. Guess that enough of what’s going on, here’s the article  and the Alex Jones Show today with Judge Andrew Napolitano from Fox News Channel as his guest for around 20 minutes.

Federal Reserve Fighting to Keep Its Bailout Secrets

The Federal Reserve is trying to ensure that what happens at the Fed, stays at the Fed.

In the first of two brewing legal battles, the Federal Reserve is trying to avoid disclosing the details of the $2 trillion U.S. loan program that kept banks afloat after Lehman Brothers Holdings collapsed in September 2008. Bloomberg News sued the Fed under the Freedom of Information Act, seeking the names of those institutions that were given loans under the program and details about how much they received. On Aug. 24, 2009, U.S. District Judge Loretta Preska ordered the release of the information, but postponed implementation of her ruling pending an appeal; the U.S. Court of Appeals in Manhattan will hear the case today.

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Meanwhile, the Federal Reserve and Treasury Secretary Timothy Geithner find themselves defending the Fed’s decision to keep secret the details of which companies got the $62 billion in AIG bailout money.


Bloomberg, which is majority-owned by New York Mayor Michael Bloomberg, filed its FOIA suit in November 2008 asking the courts to order the Fed to reveal which firms were lent money under the special lending programs, the amounts, and the assets they used as collateral. As of Sept. 23, 2009, the special lending totaled $2.14 trillion, but the pubic still doesn’t know precisely who got that money.

Fed Told AIG to Keep Agreements Secret

In a related case of government secrecy, it was recently revealed that AIG
(AIG) was asked to keep secret which of its counterparties were the beneficiaries of the billions in bailout money that firm received. Last week, U.S. Rep. Darrel Issa (R-Calif.) released emails he obtained from the New York Federal Reserve that showed officials at the Fed asked AIG not to disclose key details of their agreements to make big payouts to banks in late 2008. Treasury Secretary Timothy Geithner, who was president of the New York Fed at the time the events took place, contends he was not aware that AIG had been asked to keep that information secret, and says he was not privy to the emails in question. The emails, he points out, were sent after he had recused himself from the workings of the Fed because he was named to be treasury secretary.


Maybe Geithner wasn’t involved in these particular emails, but it’s hard to believe he didn’t know that the details of AIG’s bailout were being kept secret.
If he opposed the Fed’s secrecy, as treasury secretary he had plenty of time to make his view known, and leverage to get the details released. Again, the taxpayers deserve to know: Who benefited from the $62 billion dollars the government gave to AIG so it could pay off on bad bets made by financial institutions on mortgages that went sour.

Financial firms allegedly had such a good year that they are expected to pay bonuses equal to or surpassing payouts of 2007. Why should these firms be able to claim that disclosure of their government loans is such a risk to their survival that they need to hide behind the Federal Reserve’s veil of secrecy? Don’t stockholders of these firms have the right to know how much they’ve borrowed before billions are paid out in bonuses? It’s worth asking: If they still owe money to the Fed, should they be paying bonuses at this level?

DailyFinance.com

Treasury Won’t Say If It Has Refused to Allow Banks to Give Back ‘Bailout’ Money

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To me this proves that the story in the opinion page of the Wall Street Journal by Stuart Varney and the testimony of Judge Andrew Napolitano on the Fox News Channel a few days ago was true…even tho some questioned it because it did not give out the name of the bank because of fear of an threatened audit. Judge Napolitano called it extortion by the government for control.

Treasury Won’t Say If It Has Refused to Allow Banks to Give Back ‘Bailout’ Money

(CNSNews.com) – The Treasury Department won’t reveal the names of financial firms that are seeking to return the funds they received late last year and this year under the Troubled Asset Relief Program (TARP)–funds the firms no longer want and would like to give back to the Treasury in return for the federal government surrendering the ownership interests it took in the firms.

Despite repeated requests for the information from CNSNews.com, Treasury spokesman Jason Williams wouldn’t say how many financial instutitions want to give the money back in exchange for getting their stock back.


Williams said the government would only release the names of those banks that have successfully returned the money.

“We don’t release the names of those who have applied until we approve the allocation,” he said.

The Treasury Department also will not say whether it has refused any requests from financial institutions to repay the money they took from the government.

One institution, TCF Financial, which is based in the Minneapolis suburb of Wayzata, Minn., said it has been waiting since early March to hear whether Treasury will return the stock it owns in TCF in return for getting the money back.

“In truth we just haven’t heard one way or another, so they’re still looking at it and reviewing it and we hope to get an answer soon,” TCF spokesman Jason Korstange told CNSNews.com.

TCF, which is the largest bank to have attempted to return taxpayers’ money, wants to give back $361.2 million in bailout funds it says it didn’t need in the first place.

If successful, it would more than double the amount of public money returned to Treasury.

Korstange said that TCF was approached by Treasury to participate in its Capital Purchase Program because it is a healthy bank, but that recent changes in the program and statements from political leaders cast its participation in a negative light.

Korstange said his bank wants to return the money because of “all the changes” that have been forced on TARP.

Treasury came to the bank with the money, he said, not vice versa.

After Congress began considering additional limits on executive pay and closer inspections of participating banks, TCF decided to get out as soon as it could.

“Once that happened, the politicians decided they could run the banks (and) that they could tell us all the things we can and cannot do,” Korstange said. “So we just said, ‘Hey, we don’t need this, we didn’t need it at the beginning, and we’ll give it back to you.’”

Two other firms have announced they have applied to return the money they received from TARP–Sun Bancorp of Vineland, N.J., and Shore Bancshares of Easton, Md.

The other banks who have sought to return the money echoed TCF’s concerns, saying that congressional and administration actions have changed the rules and “stigmatized” their participation, creating a competitive disadvantage, especially executive compensation requirements and proposed federal regulation.

Why Can’t Democrats Pay Their Taxes

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Let’s see Obama is going to set high standards in his administration! Or is he? How many of us could do these things and get away with it……then get a promotion?

Nancy Killefer’s withdrawal came after the Obama team spoke with people on the Hill, and came to believe the Senate would rake her over the coals as the third Obama nominee with a tax issue.

Nancy Killefer’s withdrawal came after the Obama team spoke with people on the Hill, and came to believe the Senate would rake her over the coals as the third Obama nominee with a tax issue.

(CNN) — A senior administration official says the tax issues surrounding former chief performance officer nominee Nancy Killefer are “a little more complicated” than some reports have suggested.

There are actually a few tax issues — all in equally small amounts, all related to household help. Killefer’s withdrawal came after the Obama team spoke with people on the Hill, and came to believe the Senate would rake her over the coals as the third Obama nominee with a tax issue.

When her selection was announced by Obama on Jan. 7, The Associated Press disclosed that in 2005 the District of Columbia government had filed a $946.69 tax lien on her home for failure to pay unemployment compensation tax on household help.

Since then, administration officials refused to answer questions about the tax error, which she resolved five months after the lien was filed. Obama’s first choice for commerce secretary, New Mexico Gov. Bill Richardson, took his name out of consideration when his confirmation appeared headed toward complications because of a grand jury investigation over how state contracts were issued to political donors.

Obama talks tough with Wall St., but what about his Cabinet?

Last Thursday brought a bracing reminder of what a breath of fresh air Barack Obama can be. After news reports tallied up $18.4 billion in bonuses paid out to American financial executives last year – one in which Wall Street dragged down the rest of the economic world with its shocking failures – the president didn’t mince words.

“That is the height of irresponsibility. It is shameful,” he said. “And part of what we’re going to need is for folks on Wall Street who are asking for help to show some restraint, show some discipline, and show some responsibility.”

But the following day, when news reports came out that Obama’s health and human services secretary-designate, Tom Daschle, had initially failed to pay about $140,000 in taxes, mostly on a car and driver provided by a private equity firm, there was no scolding from the commander in chief.

Daschle, the former Senate majority leader, received more than $2 million in consulting fees from the firm along with some valuable perks. He failed to pay taxes on his car-and-driver perk. Separately, he apparently exaggerated the value of a charitable donation, leading to an inappropriate deduction. Having now repaid what he owes, Daschle hopes to be confirmed for Obama’s Cabinet.

If so, he will join Treasury Secretary Timothy Geithner, who paid $43,000 in back taxes and interest of his own, having failed to cover his share of payroll taxes while working overseas for the International Monetary Fund. With Obama’s backing, Geithner was confirmed by the Democratic-controlled Senate.

Democrats are now trying to rally around Daschle, too, portraying his tax problems as a rare blemish on a fine career. And some are saying that Daschle, like Geithner, is an absolutely crucial player in Obama’s administration. Just as Geithner’s appointment was necessary to reassure Wall Street, where he headed the Federal Reserve Bank of New York, Daschle is uniquely suited to steer the president’s healthcare proposal through Congress, his defenders say.

That may be so, and Obama, who declared yesterday he “absolutely” stands behind Daschle and who came into office with far more political capital than most presidents, may choose to grit his teeth and spend some more of it to get a second reformed tax evader confirmed for his Cabinet.

Still, the cost to Obama could be considerable.

And Obama, whose high-mindedness at times verges on aloofness, will inevitably be attacked for putting his own team’s sense of superiority – the belief that Geithner and Daschle are so talented that they’re irreplaceable – ahead of the normal sense of accountability that would apply to people who fail to pay their taxes on time.

Tolerating such lapses could also diminish Obama’s moral leadership, the strong voice that rang out in condemning last week’s news of the Wall Street bonuses. The president’s ability to call a halt to irresponsible behavior by powerful people is needed to fulfill his pledge to reform the political system.

The idea that Geithner and Daschle could amass underpayments greater than most family incomes isn’t a cause for much sympathy. And Obama, whose righteousness has struck a chord with Middle America, would do well to express his own outrage, rather than try to shield his nominees behind his own considerable presence.

Read article at Boston.com

This official says the vetting team was aware of all Killefer’s tax issues, and that she was immediately forthcoming about them. Going back to the fall, the transition had decided they wanted her for this role when they unveiled the economic team, but held off on announcing her while they determined if they were comfortable with her tax issues. They decided they were, and announced Killefer about two weeks after the rest of the team.

The decision to have her withdraw has built over last two weeks in light of similar controversy swirling around Treasury Secretary Timothy Geithner during his confirmation, and their knowledge of the growing problems surrounding Tom Daschle’s nomination. Killefer, a McKinsey executive, never formally resigned — so she still has a job there to return to.

Read at CNN.com

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