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Tuesday, February 10, 2009

Bipartisan Laughter As Economy Continues to Tank

Update: For Breaking news on Geithner’s financial-sector bailout plan rolled out this morning, go here.

Well, at least it was laughter laced with sarcasm last night from lawmakers and congressional staff in response to newly appointed Treasury Secretary Tim Geithner’s briefing on his financial-sector bailout. Geithner, you recall, was confirmed to his post after revealing his difficulties in completing his individual income tax returns.

Ryan Grim at the Huffington Post reports:

The laughter was at its height when Obama officials explained that the White House planned to guarantee a wide swath of toxic assets -- which they referred to as "legacy assets" -- but wouldn't be asking Congress for money. Rep. Brad Sherman (D-CA), a bailout opponent in the fall, asked the officials to give Congress the total dollar figure for which they were on the hook. The officials said that they couldn't provide a number, a response met by chuckling that was bipartisan, but tilted toward the GOP side. By guaranteeing the assets, Geithner hopes he can persuade the private sector to purchase a portion of them.

Congress may be able to do little more than laugh. The Federal Reserve, in extreme situations, is allowed to intervene in the financial markets in dramatic ways. The Fed jumped into the markets long before the $700 billion bailout passed through Congress by guaranteeing toxic assets held by CitiGroup and Bank of America.

The White House still has roughly $350 billion in Congress-appropriated TARP funds to use, and the officials told the group Monday night that it planned to use $50 billion for foreclosure mitigation and further amounts to shore up bank balance sheets.

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