Treasury Announces New TARP Rules Tuesday
RENEE MONTAGNE, host:
This is MORNING EDITION from NPR News. I'm Renee Montagne.
LINDA WERTHEIMER, host:
And I'm Linda Wertheimer.
President Obama has said that fixing the banking system is second only to job creation on his economic agenda. And the plans of the banking fix is to be unveiled today by Treasury Secretary Timothy Geithner. Last night, in his first primetime news conference, the president said this about his goals:
President BARACK OBAMA: One of my bottom lines is whether or not credit is flowing to the people who need it. Is it flowing it banks - excuse me - is it flowing to businesses, large and small? Is it flowing to consumers? Are they able to operate in ways that translate into jobs and economic growth on Main Street?
WERTHEIMER: For more on what we expect to hear about the plan today, we turn to NPR's Scott Horsley. Scott, this is the second half of the financial rescue effort. It began last fall at the onset of the crisis. But the Obama administration wants to do it differently from the Bush administration. Different how?
SCOTT HORSLEY: That's right, Linda. They promised this will be more consistent and transparent than the halting rescue efforts that we've seen up until now. While those efforts were successful in heading off a complete collapse of the financial system, the Obama administration says they didn't inspire the kind of confidence that's needed to get credit flowing again.
Now, it's not clear how much detail Secretary Geithner is going to offer this morning. Some parts of the plan may be rolled out later. But ultimately we expect the administration will do four things: provide some help to at-risk homeowners - because you'll remember it was foreclosures that started this whole mess; secondly, pump more money into the banks; a third, expand a government effort to encourage consumer credit; and finally, do something about those so-called toxic assets that have been gumming up the banks' balance sheets and making it harder for them to lend money.
WERTHEIMER: Secretary Geithner was originally going to give this speech yesterday. I guess he had to get out of the way for President Obama.
HORSLEY: That's right. The administration has called this bank rescue a second leg of its economic stool, and the challenge has been at that first leg, the economic stimulus package, has been so wobbly that it was hard for the president's team to move onto the others.
Last night, of course, the stimulus did clear a crucial hurdle in the Senate and so now the administration's ready to talk about step two. Remember, though, for all the teeth gnashing over the stimulus, that was the relatively easy part. With this bank rescue, there aren't going to be shiny new roads or millions of new jobs to point to, so it's likely to be a tougher sell.
WERTHEIMER: Speaking of selling, the president was in Indiana yesterday and he's in Florida today, Illinois on Thursday, trying to sell the stimulus package. So far, Scott, he seems to be pretty tough on the hits his package has taken from opponents.
HORSLEY: And he's gotten tougher in recent days. He conceded yesterday, in Elkhart, Indiana, that the stimulus bill that its current form is not perfect. But he says it's much better than doing nothing. He says it will create or save three or four million jobs and that the alternative is a downward spiral and even more layoffs.
He's, of course, making that pitch in places like Elkhart and Fort Myers, Florida, which had been very hard hit. And there's a new Pew research poll showing a majority of Americans do support the stimulus package; a slightly bigger majority support the president himself.
This is a case where the White House insists the public is ahead of Congress. White House Spokesman Robert Gibbs said yesterday, when the president makes these sales trips, he's not trying to bring Washington wisdom to Indiana or Florida but to bring that local experience of the downturn back to Washington with him.
WERTHEIMER: Now, as you said, the stimulus cleared a key hurdle in the Senate last night. Senate passage is expected today. So what's next?
HORSLEY: Well, there are some still sizeable differences between the House and Senate version to work out, assuming the Senate does make its passage today. So far the White House has downplayed the differences, saying there's, you know, about 90 percent overlap between the bills.
But the president said yesterday in Elkhart, he would like to see money that the Senate took out of the measure for modernizing school buildings, put back in. Up until now, he's avoided talked about specifics, but perhaps they now said we've got a bill, let's work in conference to shape it a little bit.
WERTHEIMER: NPR's Scott Horsley. Scott, thank you very much.
HORSLEY: My pleasure, Linda. Transcript provided by NPR, Copyright NPR.