Geithner, Summers Make Economic Case for Reform
By John Amick
The Obama administration's leading point men in reviving a sagging American economy, Secretary of Treasury Timothy Geithner and White House economic adviser Larry Summers, insist that the recession is waning and that the need for strong reforms in health care is crucial to a full economic rebound.
"In addition to rescuing the economy, we have to rebuild it on much stronger foundation, so we don't have the kind of problems that brought this expansion to an end, that led to the mess we've suffered for the last two years. And crucial to that is getting the federal deficit under control," Summers said on CBS's "Face the Nation."
"The first and most important thing for getting the federal deficit under control is substantial reform of the health-care system, and that's why the president started there."
Summers and Geithner stayed on talking points that attempted to tie together some of the main concerns about the Obama administration's long-term fiscal policies with the more immediate struggle over health-care reform. Polling this summer shows a gradual decrease in public support for Obama's push for a health-care overhaul, from 57 percent approval of Obama's actions in April to 46 percent in late July.
"We want to make sure that we're doing something that's going to reduce the growth in costs over the long term, expand access, improve the quality of care, do that in a fiscally responsible way that does not increase unduly the burden on average Americans today," Geithner said on ABC's "This Week."
Both insisted that bringing down deficits, increasing productivity throughout the American economy and keeping the burdens of such a turn around off middle-class taxpayers aren't mutually exclusive, though neither ruled out tax increases down the road.
"It's never a good idea to absolutely rule things out no matter what, but what the president has been completely clear on is that he is not going to pursue any of his priorities, not health care, not energy -- nothing -- in ways that are primarily burdening middle class families," Summers said on "Face the Nation." "That is something that is not going to happen."
Geithner acknowledged that despite claims of relief the administration has promised, achieving these goals will require more cooperation in Washington. His statements seem to show the delicate balance the administration must achieve in overhauling health care, which encompasses nearly one-fifth of the American economy, during a recession and when record deficits concern even proponents of reform.
"We have to bring them (deficits) down to a level where the amount we're borrowing from the world is stable at a reasonable level," Geithner said. "And that's going to require some very hard choices. And we're going to have to do that in a way that does not add unfairly to the burdens that the average American already faces."
Speaking on the impact of the economic stimulus from earlier in the year, both stressed patience and recognition that the recession and its long-term effects was deemed much worse in Obama's first few months in office as opposed to the current forecasts o a foreseeable reversal.
"The president is very focused and will come to this, I hope, on the long-term deficit problem; but he is very committed to carrying through on the Recovery and Reinvestment Act, which is really a program over the next two years," Summers said on NBC's "Meet the Press." "Let me say it again, because this is an important point for your viewers, the economy surprised on the downside. We didn't know how bad it was last winter. That's what we've learned from the data revision. Because we didn't know how bad it was, unemployment is high."
Geithner said that despite positive signs for the not-so-distant future, the "basic realities" of jobs losses will continue in the near term.
"What you're going to see first is growth turn positive," he said of an eventual recovery. "And then you're going to see the pace of job losses slow materially for the -- they have already slowed significantly ..... They're going to slow materially further. But again, most private forecasters -- and let's use their judgment -- suggest you're going to see unemployment start to come down maybe beginning in the second half of next year."
One initiative both Geithner and Summers mentioned as a goal to improve conditions in America was the extension of unemployment benefits at a time of a high jobless rate.
"We'll work with Congress to make sure that unemployment insurance continues to perform its basic function of protecting the unemployed," Summers said on "Meet the Press." That was an important element in the recovery and reinvestment program. It's helped people who've become unemployed; it also helped the economy by maintaining spending. And we'll do what's necessary to make appropriate, appropriate unemployment benefits available."
Summers said the popular "cash for clunkers" program that ran out of money late last week is a sign that promise isn't such a distant reality.
"(The) program has actually been far more successful than people expected, both in terms of the number of car sales it's generated, and, I should say, in terms of the environmental benefit," Summers said.
Republican Sen. Jim DeMint (S.C.) pushed back on the success of the program, saying its immediate effects don't counteract the big picture impact of such a federal government action.
"My children and grandchildren are going to have to pay for these cars, and we're helping auto dealers while there are thousands of other small businesses that aren't getting the help," DeMint said on "Fox News Sunday." "The role of the federal government is not to run the used car business."
DeMint, who has emerged as a leading voice of dissent against the Democrats' health-care reform agenda, again lamented the prospects of the current proposals in the reform debate as "job killers" and overall unhealthy for the country's deficit and Americans' choices for care.
"They cut Medicare to come up with some money, and they raise taxes on -- on small businesses, and they penalize any American with a 2.5 percent tax if they don't have government-approved health care," DeMint said. "I mean, this is not the America we know."
Rep. Charles Rangel (D-N.Y.), chairman of the House Ways and Means Committee, countered DeMint's claims that anywhere near a majority of small businesses, a broad categorical term, would be hurt by the House plans.
"Under our statistics, 96 percent of small businesses would not be hurt by this tax," he said on Fox. "It's less than 1 percent of the wealthiest people in the United States that would be taxed, and that's at a 1 percent tax."
When asked if he would support imposing a tax on insurance companies that offer gold-plated benefits, as the Senate Finance Committee has suggested they might include in their version of a reform bill instead of a surtax on the wealthiest taxpayers, Rangel said he has not ruled out any possibilities, an answer that has been indicative of the approach by Congress and Obama in not tipping their hand in the negotiations.
"I, for one, am not prepared to reject anything. Whatever they do in the Senate, they have to combine two bills," Rangel said. "They have to bring it to conference. We have three bills in the House that we successfully passed. We have to get one bill. We have to go into conference. And I don't think either side, Republican or Democrat, should be saying at this point in time what we're going to reject and what is not acceptable."
Asked if the Democrats are prepared to pass health legislation without much Republican support, Geithner framed the question this way:
"People on the Hill are going to have to make that choice, do they want to help shape this and be part of it, or do they want this country, the United States of America, to go another several decades without doing what every other serious country has done, which is to give their citizens access to basic quality care?" he said. "We're going to try to get this done on the best possible terms consistent with those principles. Can't tell you what it's going to take, but you see what the president is trying to do."
Sen. John McCain (R-Ariz.) said the prospects for a Republican-supported health bill coming out of the Senate Finance Committee is contingent on the lead GOP negotiators, Sens. Mike Enzi of Wyoming, Chuck Grassley of Iowa and Olympia Snowe of Maine, supporting what committee chair Max Baucus, of Montana, and Democratic leaders will finally decide to include. Yet McCain won't give his support for support's sake.
"I think they (GOP senators in the committee) face pressures from both sides, to be honest with you," he said on CNN's "State of the Union." "Part of the problem sometimes is you get the Stockholm Syndrome ..... and all of a sudden you become negotiators for the sake of negotiations and a result, no matter what that result is. So far that hasn't happened."
Best of the Rest:
- Summers on the economic stimulus, on NBC:
"This stimulus, this stimulus program will create more jobs. We were always very careful, very, very careful to say we'll save or create. What that was intended to say very clearly is relative to what would have taken place in its absence. We recognize nobody can know where the economy is going to be with any precision, but what we can know is that if we prevent cops and teachers from being laid off, if we enable consumers to spend more, if we put people to work investing in weatherizing 75 percent of federal buildings, then more people are going to be working than if we don't do any of those, any of those things."
- Summers on unsavory Congressional Budget Office estimates of reform proposals and whether the bills could cause a shortfall in the first decade, on NBC:
"CBO said that about one of the bills that's passed, one of the committees. This is why the discussions are continuing. No bill is going to move forward that is not over the first 10 years scored by the CBO as budget neutral. But the president's, in addition to insisting on budget neutrality, which we didn't use to do, the president's doing another important thing. It's what we've called a belt and suspenders approach. There's some things -- how we pay drug companies, for example -- where you can do the accounting very accurately and you can see what happens to the deficit. There are other things -- encouraging prevent, encouraging preventive care, taking the whole reimbursement system out of politics -- where it's much more difficult to do the exact calculation. And so the CBO doesn't give us any credit for them even though most people would say that, over time, they're likely to have some benefit. And so we're doing both sets of things. And so I think we've got a lot of basis for being optimistic that, whatever the CBO says, it's going to end up better. But we're being very conservative. That's why it's belt and suspenders. We're not taking any account of that second set of changes, the preventive care and all of that."
- Former Federal Reserve head Alan Greenspan on the improvements within the economy:
"Well, I'm pretty sure we've already seen the bottom. In fact, if you look at the weekly production figures for various different industries, it's clear that we've turned, perhaps in the middle of last month, the middle of July. And indeed you're seeing a major increase in assemblies in auto and trucks before the clunker issue even arose."
- Greenspan on the effectiveness of the Troubled Asset Relief Program:
"Collapse, I think, is now off the table. We were teetering for awhile, but I do think that the TARP program, for example, was very helpful in shoring up the capitals, that stock of banks and the like. And not an insignificant event is the $3.5 trillion increase in the stock market value of American corporations."
- Sen. McCain on Obama's tact with health-care reform:
"I think the president has got to be more specific in the -- when we come down to exactly what these proposals are. And I don't think he's done that. And in his speeches and his health care meetings, he's talked about the things that are wrong and need to be fixed, but he's not been more descriptive of what we need to do. I think they may have over learned the lesson of Clinton proposal of '93 where they were totally specific proposals, now there's not enough. At this point I think the administration, the president has to be more specific."
- McCain on Supreme Court nominee Sonia Sotomayor:
"I'm really still kind of undecided because there's no doubt that this is a great American success story. One that would be an inspiration to millions of other Americans, particularly young Hispanic or Latino women. There's no doubt there's that side of the discussion, as well."
- McCain on European allies supplying troops in Afghanistan:
"Those same allies you talked about refused to put boots on the ground in Iraq and under previous president of the United States. The Europeans no longer have significant defense capabilities, so therefore, they always opt for, quote, 'diplomacy' or some other method. America leads and we have to recognize that. We have to continue to put pressure on our allies to do whatever we can convince them to do, but let's not be too optimistic. America leads the world. And there are benefits to that and there are also huge penalties."
Posted at 1:51 PM ET on Aug 2, 2009
Share This: Technorati | Tag in Del.icio.us | Digg This
Previous: Obama: Stimulus Helped, But Rebuilding Economy Will Take Innovation, Too | Next: POTUS Events: A New GI Bill
Please email us to report offensive comments.
Posted by: LKM2 | August 3, 2009 9:28 AM
Posted by: seemstome | August 2, 2009 10:52 PM
Posted by: seemstome | August 2, 2009 10:45 PM
Posted by: jkachmar | August 2, 2009 10:36 PM
Posted by: seemstome | August 2, 2009 10:30 PM
Posted by: seemstome | August 2, 2009 10:03 PM
Posted by: seemstome | August 2, 2009 9:54 PM
Posted by: Beacon2 | August 2, 2009 9:53 PM
Posted by: douglaslbarber | August 2, 2009 9:38 PM
Posted by: seemstome | August 2, 2009 9:36 PM
Posted by: douglaslbarber | August 2, 2009 9:30 PM
Posted by: yarbrougharts | August 2, 2009 9:29 PM
Posted by: seemstome | August 2, 2009 9:28 PM
Posted by: LarryG62 | August 2, 2009 9:26 PM
Posted by: douglaslbarber | August 2, 2009 9:13 PM
Posted by: coastofutopia | August 2, 2009 8:40 PM
Posted by: equitablesolutions | August 2, 2009 7:57 PM
Posted by: vrytix | August 2, 2009 7:47 PM
Posted by: start_loving | August 2, 2009 7:36 PM
Posted by: buzzm1 | August 2, 2009 7:28 PM
Posted by: buzzm1 | August 2, 2009 7:23 PM
Posted by: buzzm1 | August 2, 2009 7:22 PM
Posted by: LKM2 | August 2, 2009 7:15 PM
Posted by: AppDev | August 2, 2009 7:06 PM
Posted by: MOMLEE | August 2, 2009 7:03 PM
Posted by: buzzm1 | August 2, 2009 6:58 PM
Posted by: buzzm1 | August 2, 2009 6:52 PM
Posted by: MPatalinjug | August 2, 2009 6:13 PM
Posted by: fwc01 | August 2, 2009 6:02 PM
Posted by: scrivener50 | August 2, 2009 5:58 PM
Posted by: 12oreo | August 2, 2009 5:47 PM
Posted by: Jimbo77 | August 2, 2009 5:39 PM
Posted by: charlietuna666 | August 2, 2009 5:38 PM
Posted by: cschotta1 | August 2, 2009 5:36 PM
Posted by: rplat | August 2, 2009 5:26 PM
Posted by: storms48 | August 2, 2009 5:23 PM
Posted by: saleemchaudhry | August 2, 2009 5:11 PM
Posted by: cschotta1 | August 2, 2009 4:54 PM
Posted by: carlyt | August 2, 2009 4:50 PM
Posted by: CJMARTIN04 | August 2, 2009 4:17 PM
Posted by: Victoria5 | August 2, 2009 4:17 PM
Posted by: SAINT---The | August 2, 2009 4:16 PM
Posted by: lingo009 | August 2, 2009 4:08 PM
Posted by: wcmillionairre | August 2, 2009 3:59 PM
Posted by: klausdmk | August 2, 2009 3:56 PM
Posted by: MOMLEE | August 2, 2009 3:56 PM
Posted by: wcmillionairre | August 2, 2009 3:52 PM
Posted by: vickie105 | August 2, 2009 3:49 PM
Posted by: myop1 | August 2, 2009 3:46 PM
Posted by: wcmillionairre | August 2, 2009 3:43 PM
Posted by: vickie105 | August 2, 2009 3:37 PM
Posted by: TooManyPeople | August 2, 2009 3:34 PM
Posted by: cschotta1 | August 2, 2009 3:24 PM
Posted by: Bushwhacked1 | August 2, 2009 3:21 PM
Posted by: LoonyLeft | August 2, 2009 3:09 PM
Posted by: ChooseBestCandidate | August 2, 2009 3:04 PM
Posted by: bluetalon | August 2, 2009 2:41 PM
Posted by: Gator-ron | August 2, 2009 2:26 PM