GOP Leaders Criticize Bank Rescue Plan, Urge Obama to Make Hard Choices'
Monday, March 9, 2009
Republican congressional leaders yesterday called President Obama's budget proposal wasteful and his plan to rescue the nation's banks unrealistic, urging the administration to "make hard choices" and allow some major financial institutions to fail.
Obama administration officials, in turn, said that fixing the dismal economy would take time. They urged patience as the administration takes up health-care reform, reviews an inefficient government procurement process, and awaits the effects of the new public spending programs and tax cuts laid out in the $787 billion stimulus package recently signed into law.
As Congress prepares to consider a $3.6 trillion spending plan, the contours of the debate between Republican leaders and the administration appeared in sharp focus on the Sunday morning talks shows.
Over the past week, Obama has emphasized that he inherited the country's dire financial condition from the Bush administration.
Those reminders, echoed yesterday by his political proxies, have grown more pointed and frequent as the stock market continues to decline, job losses mount and criticism of his plans to cure the financial malaise rises.
Last week, the Labor Department reported that the economy shed 651,000 jobs in February and that the unemployment rate had climbed to its highest level -- 8.1 percent -- since 1983.
"Well, I think, fundamentally, the economy is weak," said Peter Orszag, Obama's budget director, said on CBS's "Face the Nation." He added: "Job losses began in January of 2008. The stock market started declining October 2007. This has been, you know, eight years in the making, and again, it's going to take some time to work our way out of it."
Sen. Evan Bayh (D-Ind.), appearing on ABC's "This Week," said, "The depth of domestic problems was worse than expected. The global nature of the recession, with Europe and China now struggling, was worse than we expected."
"But," Bayh said, "let's give this a little time."
Unhappy over the size and shape of the stimulus package, Republican leaders have turned their attention to the administration's expensive bank rescue plan, which many have criticized as too vague on how it would account for the bad assets burdening many financial institutions.
In recent months, the government has given direct aid to and taken large stakes in major financial institutions, with little evidence that the system is improving.
Several Republican senators warned that the Obama administration, by trying to keep alive banks with potentially untenable balance sheets, is following the path Japan took in the 1990s that many say prolonged its debilitating recession.