Geithner On Wall Street, Elizabeth Warren, Medicare And The Housing Crisis
WASHINGTON -- At a Politico breakfast on Wednesday, Treasury Secretary Timothy Geithner defended consumer advocate Elizabeth Warren, mocked a House GOP vote on the debt ceiling, warned of "several more years" of housing problems and blasted "the financial community" for attempting to block Wall Street reforms.
"What happened yesterday was deeply unfair to her," Geithner said in an hour-long interview with Politico's Mike Allen, referring to Warren's appearance before the House Oversight Committee, in which Republicans repeatedly accused her -- falsely -- of lying. The attacks damaged GOP credibility on oversight functions, Geithner added.
The Treasury secretary also recalled his previous appearances before Congress and Warren's Congressional Oversight Panel, in which Warren repeatedly grilled him about the AIG bailout and the Obama administration's foreclosure relief program. "Tough" inquiries are good for democracy, Geithner said, but he called the House GOP's questioning of Warren "political theater."
"The oversight process is a very important thing to preserve and make strong and credible, and I think what you saw yesterday will lead everyone to question whether the oversight process is on the up-and-up."
Geithner also openly mocked an upcoming House vote on the debt ceiling, indicating that backroom discussions with Republican leadership had assured him that the United States will not default on its debts. GOP leadership, he explained, had reached out to Wall Street to assure financiers that its upcoming vote on the debt ceiling was essentially meaningless.
The Treasury secretary repeatedly insisted that there is no chance that the U.S. will default on its debts. "This is a funny place, Washington," Geithner said. "I mean, think about this... House Republicans introduce a bill that they say they're going to oppose, ask their members to vote against, and then go tell the investors of the world to pay no attention."
On Medicare, Geithner said, "we will not dismantle that basic commitment to seniors," in the name of deficit reduction, taking a swipe at the budget proposal offered by Rep. Paul Ryan (R-Wis.). He noted that cutting Medicare in order to finance tax cuts for the rich was simply not politically plausible.
Geithner obliquely referenced the continued foreclosure crisis, acknowledging that, "you still have this huge oversupply of houses" driving down home prices. Foreclosures create more vacant homes, which expands that oversupply.
"How worried are you that there is still shake-out to come in housing?" Politico's Allen asked.
Geithner responded, "we're sort of three or four years into the housing repair, you could say --"
"'Repair,' that's a nice word to describe it," Allen interrupted, prompting laughter from the audience.
"We've got several more years to go," Geithner said.
The Treasury secretary also criticized members of "the financial community" and Congress for attempting to repeal last year's Wall Street reform bill, and for attempting to prevent regulatory agencies from implementing new rules.
Allen repeatedly asked Geithner to identify specific financial reform obstructionists, but he refused to name names.
Geithner also dodged a set of questions from Allen on whether or not criminal activity took place on Wall Street in the run-up to the financial collapse of 2008. "History has not been written," on the issue, Geithner said. "I'm not really in a position to judge."
When asked which financial firms had been managed the best in the years leading up to the crash, Geithner replied, "I don't think any of them covered themselves in glory."
"The system we have today is still the system that caused the crisis," he added.
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First Posted: 05/25/11 12:39 PM ET Updated: 07/25/11 06:12 AM ET