Recession is over, Summers says
By John Amick and T. Rees Shapiro
Today on the Sunday talk shows:
ABC: THIS WEEK - Recession is over, job growth soon says Summers
Pointing to a rising GDP, more hours of work for the employed and a lower number of jobs lost in the past month as proof that the American economy is pulling out of a vast downturn, Lawrence H. Summers, President Obama's top economic adviser, said that the recession is over.
"Today, everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be," Summers said.
Summers also insisted that job growth will be seen beginning this spring.
"These problems weren't made in a month or a year, and they are going to take a substantial time to solve," he said. "But what we can take satisfaction from is that we've walked back from the brink. And you know, forget what we say. Most professional forecasters are now looking for a return to job growth by spring."
President Obama is committed to reducing the deficit, Summers asserted, but America's patience in a broad strategy is crucial for success.
"He recognizes that when we take new steps, we have to do it in the context of a framework that is fiscally responsible," Summers said. "We can't just look in isolation at one measure. We've got to look at the $8 trillion in deficit over the next 10 years that the president inherited, and start making progress with respect to those deficits. That's what the president did in his budget. That's what the health care bill does with the most consequential set of health care reforms that have ever been put forward, and they are now on the brink of passage."
Summers had tough language for banks that continue to withhold credit. He said President Obama will have a "serious talk" with bank executives Monday in the White House in attempt to ease credit lending.
"The country did incredible things for the banking industry," Summers said. "Those things had to be done to save the economy, but no major bank would be intact, in a position to pay bonuses, if that extraordinary support had not been provided. The bankers need to recognize that. They need to recognize that they've got obligations to the country after all that's been done for them, and there is a lot more they can do."
The meeting with bankers at the White House must focus on the opposite, on keeping undue regulation off of banks so small businesses can access loans, House Minority Whip Eric Cantor (R-Va.) said in a separate segment.
"I hope that the discussion centers on what seems to be a real overreaction, if you will, on the part of some auditors in the regulatory arena that are looking at risk taking as something that just shouldn't be done at all," Cantor said. "We know in our economy that the prosperity we know has been built on calculated risk."
When asked what Americans should think of the continued resistance from the Republican Party to initiatives in the Democratic Congress to improve the economy, Cantor pointed to the financial regulatory bill passed by the House Friday as a symbol of why the GOP must dig in.
"The bill that came to the floor, frankly, was a bill that created a permanent bailout for banks," he said. "It put Washington in the seat to determine which banks will fail and which will succeed, and it extended TARP in terms of making it a permanent program. That's not what America wants."
CNN: STATE OF THE UNION - Summers: Banks complaining about govt. burden is 'rich'
America's biggest banks don't realize how much they owe the government for bailing them out last year amid a finanical crisis that was largely caused by banks' reckless risk-taking behavior, Summers, said Sunday on the eve of a White House summit with bank executives on Monday.
"It was irresponsible risk taking that brought the economy to the brink of collapse," said Summers, director of the National Economic Council. "And frankly, after the Asian financial crisis, after the S&L debacle, after the 1987 stock market crash, after other things that happened, it wasn't the first time."
These banks wouldn't be in near the relative health they're in now without the American people, he said, and for banks to send a cadre of lobbyists to Washington to try to halt financial regulation legislation -- passed by the House on Friday -- is proof that attitudes in the banking sector have not changed.
"For them to be complaining about serious regulation directed at making sure this never happens again is wrong," Summers said. "For $300 million to be spent on lobbyists trying to gut serious efforts at financial reform is not how this country should be operating. For firms that have benefited from taxpayer support to be complaining about the government burdening them is, frankly, a bit rich."
When asked about Congress's plan to raise the debt ceiling, Summers said the rapidly expanding debt since the Clinton administration was forcing tough decisions now. Those complex choices center around spending in the near term to help lower unemployment while having a strategy to focus on deficit reduction in the long term once the economy is on stronger ground. An announcement earlier in the week that the administration predicts a $200 billion improvement in the bailout plan's outlook was a sign to Summers that conditions are improving.
"It's a challenging agenda," Summers said. "But what we've got to do is make sure the economy starts growing again and growing strongly, because, if we don't do that, it's going to be enormously difficult to make progress on the deficit, and then, once the economy recovers, make sure in every way we can that our situation becomes more sustainable."
In a separate segment with Sens. Mark Warner (D-Va.) and John Thune (R-S.D.), Warner agreed with Summers that near-future spending must stay consistent to pull the country out of steep unemployment.
"We've got to have a plan in place which both sides can agree on, Democrats and Republicans, both are going to have to make some hard choices," Warner said. "I did that as a governor. Every governor around the country has to do that year in and year out, and I think we need that same discipline here. And the only way I think we'll get it done is if we say bipartisan, come together, vote it straight up or down, take our lumps, both spending and revenues."
Warner called the state of the economy -- and the government's role in fixing what's broken -- as a "moment of crisis."
"I do think there are some who say don't want to change the system, but this is a moment of crisis," he said. "This is a moment -- I think the American people realize it. I think the markets, the international markets are looking at whether we will be willing to take the steps to get this deficit under control over the long haul. It's not going to happen -- you know, we didn't dig this ditch in a year, we're not going to dig out of it in a year."
Thune disagreed, saying Washington is now much too involved with the banks, and that more spending without a coherent strategy is exactly the problem.
"I think the main thing the president can do right now and the Democrat leadership in the Congress can do is do no harm," Thune said. "I think the reason that banks aren't lending and that small businesses are not investing is they are -- they see this policy uncertainty over Washington. They see more borrowing, more taxing, more debt, more spending, and in the health care bill, they see their premiums going up."
CBS: FACE THE NATION - Senate Democrats hash out what's left of health care
West Virginia Democratic Sen. John D. Rockefeller, a supporter of a strong public option and a Medicare buy-in in health reform, says he is hopeful that Senate Democrats and Independents will come together to vote for a viable health-care reform package soon.
His fellow guests on "Face the Nation," Sens. Ben Nelson (D-Neb.) and Joseph I. Lieberman, insisted the 60 votes to pass legislation don't exist without more changes to the package.
Nelson insisted that though his abortion amendment failed, he would continue to withhold support until language was changed to accomodate him. His amendment would ensure that no public funding would go to abortions in health reform, and would also bar women from buying it themselves if any subsidies from the government were part of their plan.
Nelson and Lieberman said they were leery of the compromise hashed out by ten senators in an attempt to replace a public option and that was sent to the Congressional Budget Office for scoring this week. (It sets up insurance plans run by nonprofit companies run by the government that would offer the uninsured a chance to buy into Medicare beginning at age 55.)
"But these compromises, which my friends tell me really were not agreed on, as Ben said, but just, they agreed that they were interesting enough to send to get analyzed by the Congressional Budget Office. (Majority Leader) Senator (Harry) Reid has decided that, if you let them out, they'll get mauled. And it puts us all in a very difficult position because we don't know exactly what's in them."
Lieberman said he's opposed to a Medicare buy-in, any public option and the CLASS Act's inclusion into any reform bill. Nelson called the buy-in a "forerunner" to a single-payer system, more so than a public option.
Despite his cohorts' opposition, Rockefeller continued to express optimism that senators will come together and realize the gravity of the moment.
"We're (all) working on major parts of the bill together," he said. "And it's not hard for me to feel optimistic. I do. Because history calls on us."
Senate Minority Leader Mitch McConnell (R-Ky.) excoriated any attempt to extend Medicare, calling it "unsustainable" as is.
"It's going broke in seven years," he said in separate segment on CBS. "Under the Reid bill, it's being used as a piggy-back."
He then went on to lament that Democrats are planning to shift resources from the existing Medicare program to pay for other parts of reform.
"They're taking a half trillion dollars out of Medicare, not to make it more sustainable, but to start a whole new entitlement program for a different set of Americans."
And in opposing any non-profits run by the government, McConnell attacked government-run health care programs.
"Most of us feel that the government getting in the insurance business is the first step ... to what is called a single-payer system."
MEET THE PRESS - Romer: Spending strategy is crucial
Christina Romer, chair of the president's Council of Economic Advisers, said the jobs market could get worse before it gets better, but said the unemployment rate currently is stabilizing. Romer said Wall Street recently has shown significant improvement but progress on Main Street is still lagging.
She admitted the Troubled Assets Relief Program did not prevent the unemployment rate from climbing. She said in a year she hopes to see unemployment numbers lower, with the overall goal being near pre-recession numbers of around five percent.
Romer said more spending would be necessary to lower the deficit in the long run, but said raising taxes would be catastrophic during a recession. In order to make money to spend, she said the government would have to explore more ways to save money.
FOX NEWS SUNDAY - Senators cautious about expanding Medicare
Sen. Judd Gregg (R-N.H.) said the proposal to expand Medicare coverage to Americans age 55 and older is a recipe for disaster. He said only the sickest of those who qualify would enroll and would bankrupt the system further. Gregg said the Centers for Medicare and Medicaid Services predicted the new bill, with the opt-in comprise, would cost $234 billion during the next ten years.
Sen. Claire Mcaskill (D-Mo.) said the Congressional Budget Office and CMS both said the new bill would extend the life of Medicare. But if the new Medicare opt-in compromise, which has not yet been scored by the CBO, does not "bend the cost curve" toward savings, she said she would not vote for it.
December 13, 2009; 12:42 PM ET
Categories: 44 The Obama Presidency , Sunday Talkies | Tags: cantor, gregg, lieberman, mccaskill, mcconnell, nelson, rockefeller, romer, summers
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