Changes

Geithner got off to a very bad start. He was publicly humiliated by the Senate (controlled by Democrats) when it seemed he deliberately evaded over $40,000 of federal taxes. He paid the taxes and penalties and was confirmed, with most republicans opposed.

Geithner got off to a very bad start. He was publicly humiliated by the Senate (controlled by Democrats) when it seemed he deliberately evaded over $40,000 of federal taxes. He paid the taxes and penalties and was confirmed, with most republicans opposed.

 

[[Image:Geithner1.jpg|thumb|370px|Critics feared Geithner's vague plans would crash]]

[[Image:Geithner1.jpg|thumb|370px|Critics feared Geithner's vague plans would crash]]

Geithner and the [[Obama Administration]] moved moved to handle the crisis on two fronts.  Working with Democrats in Congress (and three moderate Republican Senators), they passed the an economic stimulus bill, the "[[American Recovery and Reinvestment Act of 2009]]", with $500 billion of new spending and nearly $300 billion in new tax cuts. The stimulus will begin operations in mid-February, 2009, and supporters hoped it would slow the nosediving economy.  Conservative critics feared it would be ineffective in the short run and add to the national debt and tax burdens in the long run.

Geithner and the [[Obama Administration]] moved moved to handle the crisis on two fronts.  Working with Democrats in Congress (and three moderate Republican Senators), they passed the an economic stimulus bill, the "[[American Recovery and Reinvestment Act of 2009]]", with $500 billion of new spending and nearly $300 billion in new tax cuts. The stimulus will begin operations in mid-February, 2009, and supporters hoped it would slow the nosediving economy.  Conservative critics feared it would be ineffective in the short run and add to the national debt and tax burdens in the long run.

==More bailout]]

===Vague bailout plans===

With banks on the verge of failure, Geithner unveiled yet another massive bailout program in mid-February. Trillions would be spent to move toxic assets out of the banks, but few details were provided. Geithner has the authority to decide what to do with the second tranche of $350 billion from the $700 billion banking bailout bill passed by Congress in October 2008. He does not need Congressional approval, but went to Congress on Feb. 10-11 to explain his plans. He proposes to create one or more "bad banks" to buy and hold toxic assets, using a mix of taxpayer and private money. He wants to expand a lending program that would spend as much as $1 trillion to cover the decline in the issuance of securities backed by consumer loans. He further proposes to give banks new infusions of capital with which to lend. In exchange, banks would have to cut the salaries and perks of their executives and sharply limit dividends and corporate acquisitions. But both Congress and the financial community expressed strong disappointment with the vagueness of his plans. [[E. J. Dionne]], a prominent liberal commentator pointed to the "almost uniformly negative early reviews" of Geithner's rescue plan.<ref> E. J. Dionne, "Centrism. Meh." [http://www.tnr.com/toc/story.html?id=d47f6de8-b20f-45d5-9e3f-56335162817d ''The New Republic'' Feb. 12, 2009]; Brian Knowlton, "Geithner Is Pressed for Bailout Details," [http://www.nytimes.com/2009/02/12/business/economy/12treasury.html ''New York Times'' Feb. 11, 2009]</ref>

With banks on the verge of failure, Geithner unveiled yet another massive bailout program in mid-February. Trillions would be spent to move toxic assets out of the banks, but few details were provided. Geithner has the authority to decide what to do with the second tranche of $350 billion from the $700 billion banking bailout bill passed by Congress in October 2008. He does not need Congressional approval, but went to Congress on Feb. 10-11 to explain his plans. He proposes to create one or more "bad banks" to buy and hold toxic assets, using a mix of taxpayer and private money. He wants to expand a lending program that would spend as much as $1 trillion to cover the decline in the issuance of securities backed by consumer loans. He further proposes to give banks new infusions of capital with which to lend. In exchange, banks would have to cut the salaries and perks of their executives and sharply limit dividends and corporate acquisitions. But both Congress and the financial community expressed strong disappointment with the vagueness of his plans. [[E. J. Dionne]], a prominent liberal commentator pointed to the "almost uniformly negative early reviews" of Geithner's rescue plan.<ref> E. J. Dionne, "Centrism. Meh." [http://www.tnr.com/toc/story.html?id=d47f6de8-b20f-45d5-9e3f-56335162817d ''The New Republic'' Feb. 12, 2009]; Brian Knowlton, "Geithner Is Pressed for Bailout Details," [http://www.nytimes.com/2009/02/12/business/economy/12treasury.html ''New York Times'' Feb. 11, 2009]</ref>

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