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On Capitol Hill, Geithner Defends Policies

MELISSA BLOCK, Host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, Host:

And I'm Robert Siegel.

Treasury Secretary Timothy Geithner urged Congress today to pass financial regulatory reforms. But lawmakers were more interested in pressing the Treasury secretary on the status of the multibillion-dollar bailout. They expressed frustration with Geithner, and one Republican congressman even called for him to resign.

As NPR's John Ydstie reports, Geithner gave as good as he got.

JOHN YDSTIE: The hearing before the Joint Economic Committee was billed as a status report on financial reform legislation, but there wasn't much attention to that topic. Early in the hearing, Republican Congressman Kevin Brady of Texas recited a litany of the country's economic woes, which he blamed on the Obama administration. Then Brady did something rarely done in congressional hearings. He asked Geithner to step down.

BLOCK: The public has lost all confidence in your ability to do the job.

BLOCK: If you look at any measure of confidence in the financial system, it is substantially stronger today than when the president of the United States took office.

BLOCK: At some point...

U: Gentlemen, time has expired. (unintelligible) for five minutes.

BLOCK: ...you have to take responsibility for your decisions.

BLOCK: I take responsibility for anything I am part of doing. I'd be happy to do that. What I can't take responsibility is for the legacy of crisis you've bequeathed this country.

BLOCK: This is your budget. This is your bailout. This is your stimulus. This is your act.

BLOCK: I take full responsibility for those with great honor and pleasure.

U: Gentlemen, time has expired.

YDSTIE: Another Texas Republican, Michael Burgess, stopped short of asking for Geithner's resignation, but he told the secretary he regretted that Geithner had gotten his job in the first place. And Burgess went on to urge Geithner to shut down the controversial $700 billion TARP rescue program, which the Obama administration inherited from the Bush White House.

SIEGEL: No one believes right now that TARP is doing the job that it was set out to do.

BLOCK: I'm completely supportive of the basic proposition that we need to bring this program to an end as quickly as we can.

YDSTIE: But the Treasury secretary warned that shouldn't be done too soon. He said one of the big mistakes the U.S. made during the Great Depression and the Japanese made during the 1990s was removing emergency measures before recovery was well-established. In fact, during the hearing, Senator Amy Klobuchar, a Democrat from Minnesota suggested the administration use $40 billion of the remaining TARP funds to get community banks to lend to small businesses that are starving for credit. The White House is considering that idea. But Geithner said one hurdle is that banks are afraid they'll look weak if they participate.

BLOCK: They are exceptionally reluctant, because they feel that it's stigmatizing to come, and they feel that...

BLOCK: Do you have to call it TARP if you give them this money?

BLOCK: I would call it - like to call it anything but TARP.

(SOUNDBITE OF LAUGHTER)

BLOCK: And that would help.

YDSTIE: On the issue of China's undervalued currency, Secretary Geithner took some heat from Democrats, including Senator Charles Schumer of New York.

BLOCK: Chinese currency manipulation was one of the major causes of the global economic downturn. Today, there are certainly hundreds of thousands and maybe even more Americans who are out of work because the Chinese are unfair and manipulate their currency.

YDSTIE: President Obama's trip to China this week didn't appear to make any progress on the issue, though the Chinese have suggested in recent months that they will end their currency manipulation in the future. Geithner would not be pinned down on when that might happen, but he was optimistic.

BLOCK: My own sense is it's not going to actually take that much time.

YDSTIE: Geithner was also pointedly asked by lawmakers why the government had spent tens of billions of dollars paying off AIG creditors like Goldman Sachs in full, when some creditors had been willing to take less. Geithner said not all creditors were willing to do that and legally there was no middle road, so the government was forced to pay all of AIG's creditors in full to avoid a catastrophic failure.

After his grilling on the Hill, the White House issued a statement praising Secretary Geithner's role in rescuing the U.S. economy.

John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

John Ydstie has covered the economy, Wall Street, and the Federal Reserve at NPR for nearly three decades. Over the years, NPR has also employed Ydstie's reporting skills to cover major stories like the aftermath of Sept. 11, Hurricane Katrina, the Jack Abramoff lobbying scandal, and the implementation of the Affordable Care Act. He was a lead reporter in NPR's coverage of the global financial crisis and the Great Recession, as well as the network's coverage of President Trump's economic policies. Ydstie has also been a guest host on the NPR news programs Morning Edition, All Things Considered, and Weekend Edition. Ydstie stepped back from full-time reporting in late 2018, but plans to continue to contribute to NPR through part-time assignments and work on special projects.