Geithner on Meet the Press - Style and Substance - CommCore Consulting Group
Treasury Secretary Timothy Geithner, made the case for a budget plan Sunday on Meet the Press. (Photo: Reuters/Yuriko Nakao). YURIKO. Treasury Secretary Timothy Geithner, left, and moderator David Gregory, right, appear on 'Meet the Press' during a pre taped interview in Washington, D.C. Treasury Secretary Timothy Geithner Interview Pictures and Images. ED Timothy Geithner US treasury secretary center leaves the media area . Tim Geithner US Treasury Secretary appears on 'Meet the Press' in this pretaped interview. ED.
And that's why, again, it's so important that we work with Congress to strengthen the recovery and make sure we're creating more jobs more quickly. This past week was tax day, and I want to talk about taxes and spending. But first I want to ask you what is your level of concern about inflation as you look ahead perhaps to next year? That's our biggest challenge. When we talk about taxes and spending, the debt is a huge concern right now. Right now, America's debt is 53 percent of the total economy.
Getting out of that dynamic require either cutting back on the spending promises or raising taxes. Those are politically explosive choices. But look what he's done when he came into office.
He came in and cut taxes, as he should have, on 95 percent of working families. He provided substantial tax incentives to businesses to help stimulate private investment.
He's committed to bring these deficits down. He's outlined a very hard, ambitious set of proposals that'll cut our deficits by more than half as the share of our economy over the next four years or so. And he's convinced Republicans to join on a bipartisan fiscal commission to make sure that we can propose reforms, identify policies that will take us back to where we're But is it enough?
First of all, he is cutting taxes for 95 percent of Americans. He's also raising taxes. The Bush tax cuts will expire. There are tax hikes included in healthcare reform. Look, as Pete Domenici Well, health, healthcare reform Well, OK, but there's some--there's debate it about even though that's certainly the assertion No, but, no, but Again, in our country we turn to the independent And their judgment--and this is why we have healthcare reform today, because the president wouldn't have it any other way--in their judgment, healthcare reform will bring down our long-term deficits dramatically over time.
Why don't you have to consider additional tax hikes when you've got the likes of Alice Rivlin who worked for President Clinton, Republican Senator Domenici, and Chairman Bernanke saying, "Look, something's got to give here, and tax hikes have to be on the table in this environment. But, David, you, you said the important thing, which is the president is going to extend the middle-class tax cuts. But he is also going to let expire the tax, the tax cuts that President Bush put in place for the 2 percent of the most fortunate Americans in our country.
In addition to that, the president proposed a range of other measures to help close tax loopholes, reform international tax, tax treatment of international companies in the United States. He proposed a fee on banks on risk to help make sure we cover any losses on the TARP, and he proposed a substantial freeze on discretionary spending, reimposed the basic budget rules, PAYGO, that were in place in the '90s, helped deliver services Those are--but those are necessary And, you know, David, let me just step back for a second.
Again, just think about it this way: A--even a moderate recovery and a moderate recovery along with the president's commitment to make sure the recovery act expires, the emergency acts we took expire when the, when the economy strengthens. Now, that's not far enough. The other measures that you've just identified will take us down below 4 percent of GDP, and we've asked the commission to--which is a very talented group of people This is your debt commission?
But do you believe painful choices will be necessary by the government? Well, of course they will. But these--but of course. These are the things we can do as a country. Again, we are in a much stronger position to deal with these challenges, and it's true for any major economy across the What's a painful choice you would advocate to the president if he wants to be really serious about tackling the debt?
Well, the president has, has made some very important, and I think, good policy proposals to the Congress already to consider that are very substantial, and we hope they act on them. Any specific thing, though, that you would advocate? Just the ones, again, the ones I highlighted. Anything with regard to entitlement spending, Medicare, Social Security, that you would advocate?
Tax reform, broad-based tax reform? We're going to look at all those things, and the commission, of course, the commission and its, its basic mandate is this, is to step back from politics, take a look at all those things, and, and come forward with recommendations Two quick points before we're out of time. Would the president support a gas tax if it were part of an overall climate change piece of legislation? David, that's not something I can address today.
As you know, he's working with a number of senators to try to make sure we can put in place the kind of energy reforms our country needs. If you talk to businesses across the country, one thing many of them agree on is we need to bring certainty to what the rules of the game are and how we, how we use energy, make sure we're encouraging greater energy efficiency, not just for climate change but because it's important for energy independence, and the president's going to keep working on that.
So is he looking at a, at a gas tax? Is he considering it? But we are working on making sure we change how we use energy in this country, both for energy independence and to make sure we're using it more efficiently for climate change. Finally, before I let you go, as I mentioned, it was tax day. You also saw these tea party rallies around the country. And it seems that their biggest grievance, those that show up to these rallies, have to do with taxes, with government spending, with the size of the deficit.
How serious do you take those concerns? How viable a political force to you consider the tea party to be? Let, let me do the positive side of this, OK? We've just been through eight years where people said, many people said, "Deficits don't matter. We can, we can pass huge tax cuts, pass huge, new programs without paying for them. Now, you don't hear people say anymore deficits don't matter. You don't hear people saying that we can pass enormously--enormous expenditures of government without paying for it.
That's an important change. I think all Americans understand that our deficits are unsustainable, and I think that'll be helpful as we move to try to make the hard choices to bring them down again. Secretary, we'll leave it there. Thank you very much. Good to see you, David.Tim Geithner on Meet the Press Part3 3/4
And up next, our roundtable. The politics of the economy, what role will the tea party have on the midterm election?
After this brief commercial message. Welcome to all of you. I want to talk about this left-right political divide over the economy. But let's talk first, Congresswoman, about Secretary Geithner.
You heard what he said. New rules for Wall Street mean no more taxpayer-funded bailouts. Is it case closed? No, it is not closed at all. And what the American people want to be certain that we do not do is take boom and bust and replace it with fraud and bailout. And they are tired of the bailouts, they want this to end. But he said the banks are going to pay for it now. This too big, this "too big to fail"--and they know better than that. They know that this financial regulatory reform bill in its current form that is working its way through is going to institutionalize the bailouts.
And this is something that they do not want. Everyone is for reform, but But I have to stop you, Congresswoman. What you heard him say, the banks would actually pay for this.
Just tell me, why don't you believe that? Because you can look at history and see that it always gets passed.
It's the Reagan thing. Corporations don't pay taxes, people do. They know that they're going to see fees go up.
The way community banks are treated They could pass it on, in other words, yeah. It would be the demise of community banking. I know everyone is working to get to reform that is going to be as tough on Wall Street as it is on Washington. And Washington has some responsibility to bear in this, also. And, David, that's what they're wanting to see. They want to see real reforms. Just like they did in health care, they wanted to see reform, what they got was control. They don't want more Washington control coming out on this regulatory reform bill.
Governor, are these rules that can really prevent what we've gone through? I think the key thing you heard Secretary Geithner say is that if a bank gets in trouble, they get dismembered, they get taken over, they get--essentially, they go away.
They do away because they're punished for what they do. And I think that's the biggest incentive of all. You know, what the Republican Party is doing now is like the death squad stuff. They think if they say it often enough, "this doesn't end," "too big to fail," people will believe it. But it's not true. And this is a real test for the party of "no. And they have to say yes to something.
We're the party of K-N-O-W. They have to say something. We want people to know what's in this bill. They have to do something.
They can't keep taking money from these Wall Street companies Oh, Governor, you know that's wrong. We have to pass a strong financial reform. Governor, you know that's wrong. Well, what's fact and fiction here? You know that's wrong. Well, there are two separate issues. First is how you regulate these large, systemically risky institutions. And the bill does establish--both bills, the House and the Senate bill--for the first time, distinct federal oversight of the largest institutions whose failure could put the entire financial system at risk.
And that is something--when you said that the public does not want more Washington control, I think the polling is pretty clear that on this front the public does want more Washington oversight of these large institutions which is not available now and would now be through a council of federal regulators in the Fed.
The second issue is what you do when one of these behemoths fall over anyway and collapse, and, and that is what we went through in And if you think of the as your template for a bailout, where you put a lot of money in a, in an institution and it continues to exist--same management, stockholders, and so forth--the, the version of the Senate bill that was negotiated by Democrat Mark Warner and Bob Corker of Tennessee is designed to prevent that.
What they both say is that the resolution mechanism in the bill is designed to eliminate the management, wipe out the stockholders, force the creditors to take a haircut, and then that bank would be--or financial institution would be dismembered.
Now, Bob Corker has raised the concern in the last few days that around the edges of that there are other provisions that may allow for more federal intervention without that kind of draconian response. But he has also said that those differences could be resolved in "about five minutes" if there was good will on the part of the two parties, which Mark Warner has said as well. I mean, this is what drives people crazy around the country.
And are we really going to change any of that? Well, you know, I--we hear "reform with teeth. And you know what? A lot of people are watching what's going on in Washington and New York and their eyes are glazing over because it doesn't affect or it doesn't benefit them at all in their communities, you know?
We continue with high unemployment. The Hispanic community, almost 14 percent of the men in the Hispanic community are unemployed. And what they see is more investment in government and less investment in small towns and in small businesses. And a lot of people are saying, "You know what? Maybe the government shouldn't be so worried about funding government agencies and government programs, and let's start taking care of the small and large businesses that are in the community, and they're the ones that hire.
For the Hispanic community, something very important. Then you have E-Verify. E-Verify limits, in certain ways--because of its--by the way, it has a high error rate--the amount of Hispanics that feel that they are in some way drawn into those businesses and into those projects. Government investment is important, but government investment also has to recognize that the people who generate jobs in this country are the small businesses, are the bodegas or the supermarkets, are the gas stations.
And those people find absolutely no help out of Washington or New York. Well, so here's a larger political question for everybody. Ron, I want to start with you, because you've, you've looked at this analytically.
Who is winning politically That's a great question. Whether it's regulation, whether it's jobs, whether it's stimulus, who's winning, Republicans or Democrats, in this election year? Well, by and large it feels as though Republicans are driving the argument, and that they--look, they're--the construct that Republicans have made is that what is impeding recovery is primarily big government at this point.
After--which--and to a large extent, they have succeeded in that argument. You look at all the trend lines--Democratic advantage over Republicans on the economy, Obama approval on the economy--those are all declining. I mean, this is rather striking after the largest failure of the market economy in probably since the Great Depression.
Democrats, I think, have been losing control of the macro argument here. Wall Street, though, is a place that really--and the, and this financial regulation is a place where these two contending visions collide. Because I think the--as you heard from the congresswoman, the Republican argument primarily is that more government intervention is the problem.
'Meet the Press' transcript for April 18, 2010
And Democrats, I think, want to make the case that what led to this disaster was the hands-off approach that the Republican administration took, the Bush administration, the low tax, low regulation approach that their agenda was built around led to this.
And I think you are going to see these contending both policy and political visions very clearly on display if this bill comes to the Senate floor next week. Governor, on the economy, taxes are a big piece of this.
And here was a provocative thought. It was, it was reported by the Los Angeles Times this week.
But they don't want to quash the nascent recovery. How do you thread that needle? Well, I think the most important thing--and I think what was said about small business is, crucial. The tax cuts in the stimulus were one-third of the stimulus bill. Small businesses have received a ton of incentives both in the original stimulus bill and in the recently passed jobs bill. I think you've got to take your tax cuts and target them to job creation.
And I think the Obama administration has done a good job and is doing a better job of that recently, and I think we can do more to do that. In terms of the Bush tax cuts itself, the focus, again, has to be directed to the people who are--we're letting the tax cuts expire. Those people can afford to pay more taxes. After the Bush tax cuts expire, the tax rate will still be the same as under Ronald Reagan.
All right, Congresswoman, before, before we move on, make the case for why, as Ron suggests, the Republican Party is on the right side of this economic debate in this election year.
The reason the Republican Party is on the right side of this economic debate is simply this: The election is going to be about freedom, and the American people know that being dependent on the federal government for home loans, for your health care, for your education, for your jobs, even for the kind of lightbulb that you want to put in the fixture, is not the aspirations of a free people.
And because of that, we are on the right side of this argument. Everything that we're discussing here affects every What--but hold on, Congresswoman. What did freedom get the American people during--that led to the financial collapse? Is that not a fair question about the limits of, of the free capitalist system?
We know, we know that if you let free markets work--there is no expiration date on the free market. There is no expiration date on the American economy. What the American people do not like is the overreach of government, and they are seeing it time and again. I'm sorry, Congresswoman, my question was what did the free, what did the free market get us, what did freedom get us in the economic collapse?
But, but -- I know. But as he acknowledges himself, it's embarrassing If he pays for '03 and '04 once he's audited, doesn't he say to himself, "Well, wait, maybe I should go back to '01 and ' 02 "? He's going to oversee the IRSafter all.
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I, I understand that. And as he said, it's an embarrassment, he made a mistake, but he has the qualifications for the job. But why didn't he pay the back taxes to '01 and '02 if he did it for '03 and '04? TimTim basically had -- did '03 and '04, should have done '01 and '02, and he acknowledges he should have done it and paid them.
Why is it if this was known in November, around Thanksgiving of course is when he was announced, why didn't you all make this public so you wouldn't get into a position where you're not going to have him on day one? Well, first of all, I do believe he's going to get confirmed and I feel very good because he has the bipartisan support. Number two is we did the right thing by notifying the committee, which is the right process to do that. As you know, in some cases where committee members haven't been properly notified first, it was wrong.
So we followed exactly how you should do it.