WASHINGTON (CNN) – Treasury Secretary Timothy Geithner will announce early next week the administration's long-awaited plan to try to get toxic assets off the books of the nation's ailing banks, two senior administration officials confirm.
The plan will have three major prongs, the officials said.
In one part, the Federal Deposit Insurance Corporation would set up investment partnerships and lend those partnerships about 85 percent of the money needed to buy toxic assets.
In the second part, the Treasury Department would hire several investment firms to raise private funds, in order to try to lessen the burden for taxpayers.
The third piece involves Treasury working with the Federal Reserve to expand lending, in an effort to make it easier for consumers to get mortgages, and auto and other kinds of loans.
The officials spoke on the condition of anonymity because the plan has not been announced.
(CNN) - President Obama says Treasury Secretary Timothy Geithner’s job is safe, according to excerpts of Mr. Obama’s interview this week with CBS’s “60 Minutes.”
If the embattled Secretary were to submit his resignation, Obama said he’d tell him, “Sorry, Buddy, you’ve still got the job,” according to the excerpts.
Obama told CBS that neither he nor Geithner has discussed a possible resignation from the Treasury Department.
Geithner has faced increasing criticism since it was revealed that ailing insurance giant AIG doled out massive bonuses to executives after accepting more than $170 billion from the federal government.
In response to the criticism, Geithner told CNN’s Ali Velshi, Geithner defended his actions, but said he should have known about the scale of the problems sooner.
The president told CBS that criticism is natural, especially given the scope of the financial crisis his administration is facing.
Obama also shot back at former Vice President Dick Cheney’s criticism of some of his administration’s policies.
(CNN) – President Obama turned commentator-in-chief Saturday as he addressed the performance of basketball teams from the Atlantic Coast Conference.
As he and first lady Michelle Obama were leaving the White House for Camp David, a reporter shouted out, ““Is the ACC overrated?”
“Apparently so,” Obama replied with a grin.
Obama’s sports commentary comes the morning after two ACC teams – Wake Forest and Florida State – were upset by lower-ranked schools in the NCAA tournament.
Wake Forest, a No. 4 seed, fell to Cleveland State, a No. 13 seed. Florida State, a No. 5 seed, lost in overtime to No. 12 Wisconsin.
Obama, however, picked an ACC team to win it all, predicting the University of North Carolina will beat Louisville in the championship game.
TEHRAN, Iran (CNN) - Iran's supreme leader Ayatollah Ali Khamenei said Saturday he sees no change in U.S. policy toward Iran despite the U.S. promise of a "new beginning."
Khamenei said a change in rhetoric is not enough, and Washington must practice what it preaches, according to the English-language Press TV channel in Iran.
He also promised that Iran will change its policy if the United States does so as well, Press TV reported.
Khamenei's comments, which he made in a televised address to mark the start of the Iranian New Year on Friday, come a day after U.S. President Barack Obama reached out to Iran in a videotaped message.
A spokesman for Iranian President Mahmoud Ahmadinejad condemned U.S. foreign policy Friday in response to the video.
Obama's message spoke of "new beginnings" with the promise of a new year.
(CNN) - Mississippi Gov. Haley Barbour blasted President Obama’s budget proposal, saying it taxes and spends too much.
In the weekly GOP address, Barbour said of the proposed budget: “It reminds me of how one of our old senators used to joke about the federal budget. He said it was like a newborn baby: insatiable appetite at one end and total irresponsibility at the other.”
Barbour said the new taxes won’t come close to covering Obama’s spending, meaning “children and grandchildren will be saddled with trillions more in debt.”
“In this budget season we have choices. While states are controlling spending and balancing their budgets, the Obama budget spends too much, taxes too much and borrows too much. It's not the right choice for America,” Barbour said.
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(CNN) – Treasury Secretary Tim Geithner sat alone at the witness table answering questions and getting an earful from a panel of senators.
Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, cautioned Geithner that Americans were crazy angry about corporate bailouts.
"I have never - in the 22 years I've been here, I've never seen such anger, with the sense of betrayal, that people in positions of responsibility took advantage of them," said Conrad. "The outrage of people cannot be dismissed."
That was on March 12. It turns out, the next day was when American International Group would award $165 million in bonuses to some 400 employees.
Over the past week, Congress turned the anger over AIG into legislation. The House rushed through a bill to tax bonuses, and the Senate made a similar proposal.
(CNN) - President Obama will focus on his rallying up support for his budget in the coming week, he said in his weekly radio and Internet address.
“With the magnitude of the challenges we face, I don’t just view this budget as numbers on a page or a laundry list of programs. It’s an economic blueprint for our future – a vision of America where growth is not based on real estate bubbles or overleveraged banks, but on a firm foundation of investments in energy, education, and health care that will lead to a real and lasting prosperity,” the president said.
Obama last month presented to Congress a budget summary that he says will halve the federal deficit by the end of his first term. The budget for fiscal year 2010 includes substantial investments in health care reform, renewable energy and education.
The president said in his address he’s aware that critics are calling his plan too ambitious.
“To that I say that the challenges we face are too large to ignore. I didn’t come here to pass on our problems to the next president or the next generation – I came here to solve them,” he said.
“The American people sent us here to get things done, and at this moment of great challenge, they are watching and waiting for us to lead. Let’s show them that we are equal to the task before us, and let’s pass a budget that puts this nation on the road to lasting prosperity.”
(CNN) - Twenty state attorneys general announced investigations Friday into the $165 million bonuses paid by insurance giant AIG last week, with Connecticut's top lawyer issuing subpoenas to CEO Edward Liddy and 11 other executives.
Connecticut Attorney General Richard Blumenthal and the Democratic chairman of the General Assembly's Banks Committee want Liddy and other executives to appear Thursday and bring with them "original or copies of documents regarding the AIG Financial Products Corp. retention bonus plan and any related contracts or agreements."
"Now living off supersized taxpayer-paid bonuses, these AIG employees have a moral and legal obligation to appear at this legislative hearing and disclose details about corporate compensation to employees as well as investment decisions by AIG Financial Products Corp. involving credit derivatives and dealings that have led to market destruction," said Blumenthal, a Democrat.
AIG officials are citing a Connecticut law to justify their payment of the bonuses. The law says that employees can sue in civil court for payments withheld that are due them and recoup double the amount of money. Many AIG employees live in Connecticut.
WASHINGTON (CNN) - Alaska Gov. Sarah Palin said she was "shocked" to hear President Obama's offhand comment referring to the Special Olympics in an appearance on the Tonight Show on Thursday night.
"This was a degrading remark about our world's most precious and unique people, coming from the most powerful position in the world," Palin said in a statement released Friday. "These athletes overcome more challenges, discrimination and adversity than most of us ever will. By the way, these athletes can outperform many of us and we should be proud of them. I hope President Obama's comments do not reflect how he truly feels about the special needs community."
Palin's son, Trig, has Down Syndrome.
California First Lady Maria Shriver, whose mother, Eunice Kennedy Shriver, founded the Special Olympics, said she doesn't think Obama meant to offend anyone, but that this incident shows that "there is still much work to be done." Shriver's brother, Tim, is the current chairman of the organization.