July 25, 2009
GEITHNER URGES FINANCIAL REFORM BY END OF YEAR
Treasury Secretary Timothy Geithner has urged Congress to approve a financial package of regulatory system reform supported by President Barack Obama by the end of the year. Geithner and Federal Reserve Bank Chairman Ben Bernanke testified with other officials to the House of Representatives Financial Services Committee:
House and Senate committees have worked for months to move financial system reform forward, including steps to intensify supervision of financial institutions, strengthen existing regulation, and create a Consumer Financial Protection Agency.
Under the proposal the House Financial Services Committee is developing, the Federal Reserve — the U.S. central bank — would gain additional powers to regulate risk at large companies that could trigger another financial crisis if they collapse.
Regulatory reform is a major priority for President Obama as part of his administration’s response to the financial crisis he inherited from the Bush administration.
Treasury Secretary Geithner said there is an urgent need to overhaul what he called an outdated and ineffective regulatory system that helped create the financial crisis. He said a new consumer protection agency would have broad authority to write and enforce new rules on financial products,
“We need to create an agency that restores confidence of consumers and the confidence of financial investors with the authority to prevent abusive and unfair practices while at the same time promoting innovation and consumer access to financial products,” he said.
Though majority Democrats had hoped to get a financial reform package to a vote by August, the committee chairman, Democrat Barney Frank, now says he expects to finalize consumer protection and other measures by September.
Many House and Senate Republicans have criticized the reform proposals, asserting that some would have the effect of discouraging competition and innovation. Texas Republican Jeb Hensarling criticized a proposal to create an agency to assess financial products:
“The proposal represents one of the greatest assaults on consumer rights I have witnesses. The legislation will stifle innovation, perhaps the next online banking service or the next frequent flyer mile offering, and worse yet will contract credit to our small businesses at a time of historic unemployment,” he said.
Federal Reserve chairman Ben Bernanke said all systemically important institutions must be subjected to more effective supervision. Whatever final plan emerges, he said all federal regulators must focus on accountability:
“Collective decision-making can mean that nobody owns the decision and that the lines of responsibility and accountability are blurred. Achieving an effective mix of collective process and agency responsibility with an eye toward relevant institutional incentives is crucial to successful reform,” said Bernanke.
Sheila Bair, head of the Federal Deposit Insurance Corporation, which guarantees consumer bank deposits, urged lawmakers to ensure an effective, credible and orderly process of winding down troubled firms whose collapse could trigger a new financial crisis.
She supported the proposal for a new consumer protection agency, but said it could be tougher:
“The administration’s proposal would be even more effective if it included even tougher oversight for all financial services providers, and assured strict consumer compliance oversight for bank,” she said.
Bair also said a plan to take responsibility for examining and enforcing rules away from federal bank regulators would disrupt consumer protection oversight of banks, and fail to address the current lack of supervision of non-bank institutions.
Another witness urged lawmakers to maintain uniformity of federal rules affecting banks in various U.S. states. Joseph Smith, North Carolina Commissioner of Banks voiced this concern:
“Our major concern is that the legacy of this crisis could be a highly-concentrated and consolidated industry that is too close to the government and too distant from consumers and the needs of its communities,” Smith said.
In his testimony Friday, Treasury Secretary Geithner said the administration will work with Congress as legislative proposals are refined, but he added that there should be no disagreement about the need to act on regulatory reform.
July 24, 2009
OBAMA PROMOTES HEALTH CARE REFORM IN CENTRAL US
President Barack Obama is traveling the country to rally support for his plan to reform the U.S. health care system. The president on Thursday took his campaign to a public forum near the midwestern city of Cleveland, Ohio.With a growing number of Americans skeptical about his health care overhaul plan and with the proposal hitting roadblocks in Congress, President Obama made his pitch to the American people.
“We can rescue our economy,” said President Obama. “We can rebuild it stronger than before. We can achieve quality, affordable health care for every single American. That is what we are called upon to do. That is what we will do, with your help, Ohio.”
The United States is the only major industrialized country without a comprehensive national health care system. The president is seeking fundamental changes in the nation’s $2.4 trillion system of medical care.
Before an estimated 1,600 people in the Cleveland suburb of Shaker Heights, Mr. Obama again stressed that reforming health care cannot wait.
“We spend one of every six of our dollars on health care in America, and that is on track to double in the next three decades,” said Mr. Obama.
While Mr. Obama campaigns for health care reform, top Democratic lawmakers in Congress have abandoned their plans to meet the president’s deadline for approving his initiative. Senate Majority Leader Harry Reid says senators will not vote on the plan before their August recess, as Mr. Obama had wanted. Reid cautioned that more work is needed to devise the right plan.
The president told Ohio residents that he also wants to get it right, but that he wants it done promptly.
“I have no problem, if I think people are really working through these difficult issues in making sure that we get it right,” he said. “But I do not want a delay just because of politics.”
Mr. Obama described those who take issue with his plan to reform health care as “naysayers and skeptics”. Both Democrats and Republicans in Congress have expressed concern about the cost of the plan, which some experts put at far more than the $1 trillion dollars estimated by the White House.
Despite Mr. Obama’s almost daily efforts to build support for his proposed health care overhaul, resistance seems to be building. A recent Associated Press poll shows that 43 percent of Americans disapprove of the president’s health care initiative, compared with 28 percent in April.
July 23, 2009
OBAMA ADMINISTRATION TO MISS DEADLINE FOR GUANTANAMO BAY REVIEWS
Officials with the Obama administration say they will miss a self-imposed deadline for completing a detailed plan on dealing with terrorist suspects detained at a military prison in Guantanamo Bay, Cuba.
The officials said the deadline for the report by a Justice Department-led task force, set for Tuesday, has been extended for another six months. The panel has instead issued a short interim report summarizing how they would prosecute the 229 detainees still held at the facility.
A separate task force created to examine interrogation policy has been given a two-month extension to submit its report.
President Barack Obama created the task forces shortly after taking office in January, when he ordered the closure of the detention facility at Guantanamo Bay by next January. The officials insist the administration will meet that deadline, despite the delay in the reports.
Mr. Obama has vowed to close the facility, which has been denounced by human rights groups over allegations of harsh treatment of the detainees.
But the president has been hampered in his goal to shut down Guantanamo by congressional lawmakers opposed to transferring the detainees to U.S. soil for trial.
More than 50 detainees have been approved for transfer to other countries.
The interim memo submitted by the task force dealing with detention policy calls for prosecuting the detainees either in civilian courts or military commissions. The memo says the prosecutions must occur as soon as possible, but insists the accused be given “a full and fair opportunity to contest the charges against them.”
July 22, 2009
BIDEN: US COMMITTED TO ‘STRONG AND PROSPEROUS’ UKRAINE
Vice President Joe Biden says the United States is committed to a strong and prosperous Ukraine, and he says U.S. moves to reset relations with Russia will not come at Ukraine’s expense.
Biden spoke Tuesday in the Ukrainian capital, Kyiv, at the start of a three-day mission to that country and a second former Soviet republic, Georgia.
Speaking alongside Ukrainian President Viktor Yushchenko, Biden said the United States strongly supports Ukraine’s right to choose its alliances. He also welcomed its decision to move toward alignment with the Euro-Atlantic community.
Russia has voiced strong opposition to Ukrainian efforts to join NATO. It says the potential presence of the Western military alliance on its borders would be an intrusion into its traditional sphere of influence.
The U.S. vice president also meets Tuesday with Mr. Yushchenko’s political rival, Prime Minister Yulia Tymoshenko, to discuss ways to deepen bilateral ties.
He was expected to encourage both the prime minister and the president to end months of political feuding that has brought governance in the country to a virtual standstill.
The vice president visits Georgia Wednesday and Thursday for talks with President Mikheil Saakashvili. He also will meet with opposition leaders who have been holding non-stop, but dwindling, protests in downtown Tbilisi trying to force him to resign.
On Monday, Mr. Saakashvili announced a series of election reforms, including the direct election of mayors and more opposition access to public television. He has refused to heed the opposition’s demand that he step down before his term ends in 2013.
July 21, 2009
CLINTON MEETS INDIAN LEADERS IN NEW DELHI
U.S. Secretary of State Hillary Clinton met Prime Minister Manmohan Singh and other top Indian officials in New Delhi Monday, on a visit aimed cementing a growing U.S.-Indian strategic partnership. Clinton says she believes neighboring Pakistan has been making efforts combat terrorist elements on its soil.
Clinton’s India visit, which began late Friday in Mumbai, has been filled with reminders of the Pakistani-based terrorist attacks on that city last November that killed 166 people and set back relations between the two South Asian powers.
The secretary stayed at one of two Mumbai hotels hit by the terrorists and attended a commemorative event there for the victims.
At a media event on the eve of her official meetings here, Clinton said she believes Pakistan has, in the recent months, been making real efforts to curb extremists that have been operating on its territory:
“In the past six months, in the course of working with the government of Pakistan, we believe that there is a commitment to fighting terrorism that permeates the entire government. And, that is what our expectation is as well. We expect it,” said Clinton. “We talk about it all levels of our government, military, civilian, intelligence. And I also have sent messages very directly to the Pakistani people that this is in the interests of Pakistan.”
Clinton’s assertion that the anti-terrorism commitment is government-wide in Islamabad came in response to a question about Pakistan’s intelligence service, which has long been accused ties with Islamic extremists.
July 20, 2009
TOP US ADVISOR: ‘US ECONOMY BACK FROM THE BRINK’
A top economic advisor to U.S. President Barack Obama said the country’s economy is no longer in a “free-fall” and substantial progress is being made.
Presidential Economic Advisor Lawrence Summers said fears of an economic collapse that had gripped the nation just six months ago are starting to ease.
“If we were at the brink of catastrophe at the beginning of the year, we have walked some substantial distance back from the abyss. A majority of businesses now report that they expect improved economic conditions – the opposite of six months ago,” he said.
The comments from Summers, a former U.S. Treasury Secretary, came as investors and consumers were starting to see some signs of improvement.
Earlier this week, the second largest U.S. bank, JP Morgan Chase, said profits jumped by 36 percent for the three months that ended in June. And investment bank Goldman Sachs said its profits jumped 33 percent.
Summers said that shows the president’s $787 billion recovery plan is working.
“Let me be absolutely clear. There is no financial institution that would be reporting the kind of positive results that we have seen in the last quarter but for extraordinary public support provided by the government,” he said.
Some leading technology companies, including Intel, IBM and Google also said they expect the economy to grow stronger in the next six months.
Still, there are signs that the economy is still struggling. The most dramatic, a report Thursday that found one out of every 84 homeowners has been told they are in danger of losing their home.
Rick Sharga is with the real estate information services company RealtyTrac:
“We anticipate we will see over three million homes get a foreclosure notice this year. We probably won’t peak until close to the end of this year,” he said.
Critics of the Obama administration also point out the U.S. unemployment rate stands at 9.5 percent and that top economic officials say it will likely peak at more than 10 percent.
Presidential Economic Advisor Larry Summers admitted there will be setbacks, but he said the U.S. will emerge with a stronger, export driven economy.
July 19, 2009
HOUSE COMMITTEE TO INVESTIGATE CIA BRIEFINGS FOR CONGRESS
A key U.S. House of Representatives committee has launched an investigation of CIA briefings given to Congress. The senior Republican on the House Intelligence Committee has accused Democrats of aiming to use the investigation, which would likely include a probe of former Vice President Dick Cheney’s involvement, for political purposes.
In a statement, intelligence panel chairman Silvestre Reyes, a Texas Democrat, said the investigation will seek to learn whether congressional intelligence committees were kept fully and currently informed as required by law in various briefings the CIA gave to Congress.
Reyes says this will include a briefing CIA Director Leon Panetta gave the intelligence committee on June 24, in which he revealed the existence of a previously secret program authorized under the Bush administration, but canceled by Panetta after he learned of its existence.
After that briefing, committee Democrats released a letter they sent to Panetta asking that he correct an earlier statement he made amid controversy last May over House Speaker Nancy Pelosi’s allegation that the CIA misled Congress about the use of harsh interrogation methods on detainees.
Media reports quoting various unnamed intelligence and other sources have described the secret program as an effort to assassinate senior leaders of the al-Qaida terrorist organization.
Panetta also informed lawmakers that he was told the CIA was ordered to withhold information about the secret program by former Vice President Dick Cheney.
Representative Reyes said the decision to go ahead with the investigation was taken after careful consideration and in consultation with the ranking Republican on the committee, Republican Pete Hoekstra.
But in his own statement, Hoekstra accused Reyes of backing away from an understanding reached in discussions to conduct a bipartisan balanced review of congressional notifications.
Hoekstra said that to speculate on potential criminal behavior in the absence of substantiated facts showed Democrats want to politicize important intelligence matters.
Representative Reyes pledged to make the investigation fair and thorough so it would not become a distraction to the work of those serving in the CIA.
A CIA spokesman, Paul Gimigliano, was quoted in media reports Friday as saying the agency shares that goal and will work closely with the intelligence committee.
Democratic Representative Jan Schakowsky of Illinois, who heads the Subcommittee on Oversight and Investigations under the House Intelligence Committee, had earlier vowed to conduct a separate investigation into specific details of the reported CIA assassination plan.
July 18, 2009
US ENVOY: WASHINGTON READY FOR TALKS WITH NORTH KOREA
A top U.S. diplomat says Washington remains ready for talks with North Korea, but will enforce sanctions aimed at shutting down Pyongyang’s nuclear and missile programs.
New U.S. Assistant Secretary of State for East Asia and Pacific Affairs Kurt Campbell told reporters upon his arrival in the South Korean capital of Seoul Saturday that under the right circumstances, the U.S. would be prepared to sit down with North Korea if Pyongyang would abandon its nuclear ambitions.
Campbell discussed the issue with Japanese officials in Tokyo Friday and told reporters that it is important to send a collective message to North Korea that it is not too late to return to what he called “responsible negotiations.”
Campbell and Japanese officials agreed to strengthen the U.S. defense of Japan against any nuclear attack by North Korea.
North Korea’s nominal number two leader Kim Yong Nam said Wednesday that talks with foreign powers were impossible without respect for the sovereignty of the communist state.
Japan, South Korea, Russia, China and the United States are parties in disarmament talks with North Korea.
The last round of talks in December in China ended without an agreement. Since then, tensions on the Korean peninsula have steadily worsened.
North Korea raised international concern when it tested a long range missile in April and conducted a nuclear test in May. In June, the United Nations imposed new strict sanctions against the country to prevent it from acquiring material needed for its nuclear programs.
Campbell will join U.S. Secretary of State Hillary Clinton at a regional forum of the 10-member Association of Southeast Asian Nations (ASEAN) next week in Thailand.
July 17, 2009
GEITHNER SEES GOOD SIGNS FOR ECONOMY
A key U.S. official says there is reason to be encouraged about the economy.
U.S. Treasury Secretary Timothy Geithner met Thursday with French Prime Minister Francois Fillon and French Finance Minister Christine Lagarde in Paris.
Geithner says efforts to reform the U.S. financial system are creating a greater sense of confidence and that businesses are now smarter about taking risks. But he warns there is still a need for comprehensive reform of the way financial companies pay their employees.
Geithner and the French prime minister also spoke about the impact of economic stimulus packages and about the possibility of new sanctions against Iran over the country’s failure to abide by United Nations resolutions concerning its nuclear program.
The U.S. treasury secretary is on the final leg on a trip that has also taken him to the United Arab Emirates and Saudi Arabia.
Geithner visited Abu Dhabi as part of an effort to ease concerns among Gulf leaders about their U.S. investments.
On Tuesday, Geithner told business representatives in Saudi Arabia that the United States recognizes its responsibility to protect the dollar, given the currency’s role in the international financial system.
Five Gulf nations, including Saudi Arabia and the UAE, peg their currencies to the dollar.
