Congress Lashes Out at Obama on Economy

Washington Post: Many Members Angry at Pace of Recovery, Treasury Secretary Geithner and/or Financial Regulatory Plans

(Washington Post)  This story was written by Brady Dennis, Zachary A. Goldfarb and Neil Irwin.

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Growing discontent over the economy and frustration with efforts to speed its recovery boiled over Thursday on Capitol Hill in a wave of criticism and outright anger directed at the Obama administration.

Episodes in both houses of Congress exposed the raw nerves of lawmakers flooded with stories of unemployment and economic hardship back home. They also underscored the stiff headwinds that the administration faces as it pushes to enact sweeping changes to the financial regulatory system while also trying to create jobs for ordinary Americans.

President Obama's allies in the Congressional Black Caucus, exasperated by the administration's handling of the economy, unexpectedly blocked one his top priorities, using a legislative maneuver to postpone the approval of financial reform legislation by a key House committee.

Two buildings away, at a session of the Joint Economic Committee, Republicans escalated their attacks on Treasury Secretary Timothy F. Geithner, including a call for his resignation.

"Conservatives agree that as point person, you failed. Liberals are growing in that consensus as well," said Rep. Kevin Brady (R-Tex.). "For the sake of our jobs, will you step down from your post?"

Rep. Michael C. Burgess (R-Tex.) took a different tack. "I don't think that you should be fired," he told Geithner. "I thought you should have never been hired."

Even Sen. Charles E. Schumer (D-N.Y.), a friend of the administration, suggested that Geithner had been inconsistent in addressing China's practice of keeping its currency low against the dollar.

And Rep. Peter DeFazio (D-Ore.) said Wednesday on MSNBC that he thinks Geithner should step down, pointing to his handling of the aftermath of American International Group's meltdown.

Across Capitol Hill, senators signaled their opposition to rushing regulatory reform. While some Democrats voiced reservations about parts of the bill, Republicans went further, faulting Sen. Christopher J. Dodd (D-Conn.) for pushing ahead before the roots of the crisis were understood.

Perhaps most troubling for the administration was that one of the few measures to succeed Thursday was an amendment by Rep. Ron Paul (R-Tex.) that would subject the Federal Reserve to unprecedented scrutiny. The amendment, which won bipartisan support in the House Financial Services Committee despite the reservations of administration officials, would allow the Government Accountability Office to audit all of the Fed's operations, including its decisions on interest rates and its transactions with foreign central banks.

Paul and allies in both parties -- more than 300 members of Congress have endorsed the measure -- are looking to increase oversight of an institution they consider partly to blame for the financial crisis. Federal officials and many private economists worry that the amendment could make future central bank policymakers reluctant to take unpopular steps to prevent inflation or support the economy for fear of second-guessing by Congress and government auditors.

The House committee had been set to vote to send the final piece of its regulatory reform package to the House floor after months of debate. That is, until the committee's chairman, Rep. Barney Frank (D-Mass.), told a shocked committee room that passage of the bill would be delayed until Dec. 1 because the Congressional Black Caucus wanted the administration to do more to help African American communities suffering in the economic decline.

Frank told committee members that black lawmakers were "frustrated by the response to the economic situation by the administration." He said the caucus had no issues with the legislation itself. "They want obviously to continue to have some bargaining power with the administration," he said after the hearing.

The caucus itself did not publicly detail its concerns Thursday, but one member, Rep. Maxine Waters (D-Calif.), issued a statement: "The recession has created a unique systemic risk that threatens all parts of the African-American community, including the poor and the middle class."

The caucus began discussing its concerns with Frank and the administration several weeks ago. Frank hosted a meeting Monday night between caucus members, Geithner and White House Chief of Staff Rahm Emanuel.

"You're talking about people whose constituents have been badly hammered by this," Frank said. "Given the nature of this recession, there needs to be some more conversations."

Frank said the caucus had concerns about whether minorities were being fairly represented in helping carry out Treasury's bailout programs and other federal efforts to resolve the financial crisis. The government has contracted out much of the work to Wall Street firms.

Congressional aides said the caucus's concerns are similar to those of the Democratic Party's liberal wing. Caucus members are pushing for legislation that would directly lead to new jobs by providing tax benefits, for example, that would provide incentives for home renovations and funding for new infrastructure projects. They also want to extend health-care and unemployment benefits.

Meanwhile, Geithner was taking a beating as he urged Congress to pass regulatory reform as quickly as possible, arguing that delay would create uncertainty for businesses across the country. Lawmakers sharply criticized him for his role in the crisis during the tense Joint Economic Committee meeting. They were particularly critical of his involvement in the decision, as president of the New York Fed, to bail out AIG.

But Geithner pressed forward: "To ensure the vitality, the strength and the stability of our economy going forward, we must bring our system of financial regulation into the 21st century. Nobody in my job should ever be in the position again of having to come into a crisis like this without those basic authorities."

Dodd, chairman of the Senate Banking Committee, chose the marbled Caucus Room in the Russell Senate Office Building -- site of past hearings on Watergate, Pearl Harbor and the Wall Street abuses during the Great Depression -- to open debate on a massive draft bill designed to achieve the most ambitious reworking of the financial system in decades.

"This is one of those moments in our nation's history that compels us to be bold," Dodd said.

But soon, ranking committee Republican Richard C. Shelby (Ala.) took the floor, and for 18 uninterrupted minutes he opined that nearly every element of Dodd's bill was misinformed, uninformed, unnecessarily rushed or just plain flawed. "This committee has not done the necessary work to even begin discussing changes of this magnitude. Nevertheless, you have laid a bill before the committee," Shelby said. "I will be opposing this legislation. Not because we disagree on its ends, but rather on its means."

Shelby said Dodd was wrong not to conduct an investigation into the causes of the recent financial crisis before pushing forward with legislation. He said rather than ending the problem of institutions that are "too big to fail," the current bill expands the government's ability to bail out big banks. Shelby apologized for the length of his critique, expressed his hope that the two men might "yet find some common ground," and yielded the floor.

"Well," Dodd said in the morning's only moment of levity, "I thank you for the endorsement."

Staff writer David Cho contributed to this report.

[Ichabod09]

This is a unique political phenomenon in which constituent outrage/frustration pooopy rolls "up the hill". At this point, the crowd on Olympus deflects the oncoming pooopy back down the hill to the Prez.<br /><br />It is at this point that the Prez is grateful for his humble upbringings which required him to learn to tap dance. Would Mr. Bojangles be an appropriate moniker for our Dancer in Chief? We know Sir, yur dancing as fast as ya can.

[garyl615]

It must be hell to be a clean up democratic president following eight years of a republican addicted to exlax...******** everywhere and on everything...you have my gratitude President Obama.

[rfp1959]

So after 26 years of the Republicanazis destroying the economy and leading the biggest transfer of wealth from the middle class to the wealthy (the top 1% of the rich own 95% of all wealth) in the history of the planet they have the unmitigated gall to blame Obama for the state of the economy? A little history lesson for these morons (yeah, I know, for the Repukes the truth is not an option but here I go anyway); the recession of 2001 lasted about 6 months (a relatively minor one) and yet it took 18 months for the jobs to return. So how long should it take to recover from an economic disaster which is being compared to the great depression (gee, wasn't that caused by another repub admin)? 2 years minimum.

[bringbackmfg]

Collectively, we need to stop apologizing to the rest of the world for being a wealthy country. Stop sending billions and billions around the world and instead, teach countries how to grow wealth for themselves. If they can't grow and leave behind their outdated ideologies, too bad. Bring back domestic manufacturing and the jobs will follow which in turn will improve the economy. Then let's pay off China, thank them for the loan and say no thanks to their goods.

[midlclass]

lets see what will happen when these so called shovel ready projects hit the road this spring. on the other hand i see another large company just chopped 3500 jobs when's corperate america going to help out somwhere along the line a little less profit and more workers staying employed may be best for all. if congressional republicans are so quick to critize about creating jobs lets not hear any complaints about jobs being created and then calling them pork. how about these same repubs introducing a 1.2 trillion dollar bill to restore our infra structure to a B rating. rebuilding bridges, roads and runways dams and the electrical grid would sure go alot farther than bailing our the like's of AIG. They aren't going to do it though. it goes against the repub way of no we can't. replacing geitner won't make any differance the same problems will still be there and their will always be the same infighting between the repubs and the dems. and all the ussual finger pointing.

[sjc_1]

Congress has as much to do with creating jobs as the President. They sit and complain but do nothing themselves. It is about time THEY got it into gear and helped out too.

[underdogus2009]

Are Americans last to realize the financial structure destruction means the US Economy does not enter a recession, but rather a bizarre unprecedented disintegration? It seems so.....

[underdogus2009]

The US Dollar rally in the last several weeks has been remarkable. At closer examination, it highly resembles a spurt prior to death. Imagine an old man who just had a heart attack, lost feeling in certain body parts, his mind not working right, plenty of nonsense gibberish coming from his mouth, and now he is dancing hard on some last gasps. The vast liquidation movement is akin to the old man going through an embalming process while dancing atop the tables at the funeral parlor, as bidding proceeds for his cadaver.