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New York (CNNMoney.com) - Treasury Secretary Tim Geithner defended the government's bailout of the financial system on Tuesday, saying it has been a "critical" part of the economic recovery and will ultimately cost less than expected.
Geithner is testifying before the Congressional Oversight Panel, the main watchdog for the Troubled Asset Relief Program, or TARP. The government enacted TARP in 2008 at the height of the financial crisis. The program is due to expire in October.
While the economy remains challenged, Geithner said TARP and other "extraordinary actions" taken to combat the financial meltdown "have helped stabilize the financial system and restore economic growth."
Geithner acknowledged that some of the government's efforts were "unpopular." The program, initially funded at $700 billion, was used to pour billions of tax dollars in to troubled Wall Street banks, insurance giant American International Group and the auto industry.
But he argued that such steps were "essential" to contain the crisis and that they have improved conditions for homeowners, consumers, businesses, and state and local governments.
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(CNN) - Defense Secretary Robert Gates issued a statement Tuesday noting that Gen. Stanley McChrystal "has apologized to me and is similarly reaching out to others named in (the Rolling Stone) article to apologize to them as well. I have recalled Gen. McChrystal to Washington to discuss this in person."
Gates said he read "with concern" the Rolling Stone story, and he believes McChrystal "made a significant mistake and exercised poor judgment in this case."
"We are fighting a war against al Qaeda and its extremist allies, who directly threaten the United States, Afghanistan, and our friends and allies around the world," Gates said. "Going forward, we must pursue this mission with a unity of purpose. Our troops and coalition partners are making extraordinary sacrifices on behalf of our security, and our singular focus must be on supporting them and succeeding in Afghanistan without such distractions."
Washington (CNNMoney.com) – Lawmakers on Tuesday will consider a deal that would house a powerful new consumer finance regulator inside the Fed.
The Senate and the House passed different versions of Wall Street reform legislation, and last week 43 lawmakers started melding the two bills together.
Lawmakers start meeting at 12 p.m. ET on Tuesday to consider consumer protection issues, as well as how to monitor risk in the financial system and how to fund a new process for taking down failing financial firms.
The reforms aim to strengthen consumer protection, shine a light on complex financial products and create a new process for taking down giant, failing financial firms.
Washington (CNN) - While the South Carolina gubernatorial runoff pitting Nikki Haley against Gresham Barrett is claiming a lot of the national and local attention, there is also another interesting political dynamic underway in the state.
Two of the other GOP runoff elections Tuesday are featuring sons of prominent state politicians trying to carry on their father's legacy.
Paul Thurmond, the youngest son of the late Strom Thurmond who was the longest serving and oldest Senator in U.S. history, is running for the nomination for the congressional seat in the First Congressional District, which covers the North Charleston and Myrtle Beach areas. His opponent is Tim Scott, a state representative and an African-American who is hoping to help diversify the Republican ticket. Scott beat Thurmond handily in the June 8th primary. While Thurmond has a lot of backing of local establishment figures, Scott has received of support from national conservative activists, including the Club for Growth, Sarah Palin and Mike Huckabee.
The elder Thurmond ran for president in 1948 as a segregationist but later disavowed those views.
An ad from the younger Thurmond features him, a member of the Charleston City Council, sitting next to his father. The ad features Paul Thurmond telling the audience "Family is the fabric of South Carolina."
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Columbia, South Carolina (CNN) – The Republican gubernatorial runoff in South Carolina started with a bang, but it appears the race will go out with a whimper.
The closing month of the four-way GOP primary took a particularly nasty tone, even by South Carolina's famously bare-knuckle standards, as front-runner Nikki Haley withstood multiple allegations of infidelity and an ethnic slur hurled at her by a self-described "redneck" lawmaker and political foe.
Haley, hoping to become the state's first female governor, nearly cruised to a breathtaking win. She captured just under half the vote and almost avoided a two-week runoff against the second-place finisher, U.S. Rep. Gresham Barrett.
But it's been a somewhat sleepy two weeks in the Palmetto state ever since as Haley kept relentlessly to her reform message and Barrett struggled to find ways to blunt her momentum. Full story
Washington (CNN) - The Republican National Committee launched "Obama's Chicago Network" on Tuesday, a new web video designed to look like a NBC network summer lineup promotion.
The video is complete with the familiar-sounding television voiceover that touts four new "shows": "Dancing with the Law" (Dancing with the Stars), "The Colorado Hills" (The Hills), "I'm a Politician, Get Me Out of Here!" (I'm a Celebrity, Get Me Out of Here!) and "Job or No Job" (Deal or No Deal).
"Obama's Chicago Network: it's not TV, it's reality," the ad concludes.
The video is hosted on a website with short summaries of each fake production and focuses on the Obama administration's ties to Illinois ex-Gov. Rod Blagojevich, Pennsylvania Rep. Joe Sestak and Colorado Senate candidate Andrew Romanoff.
"When Barack Obama became the 44th President of the United States, he promised to usher in a new era of unparalleled transparency and open government in Washington," RNC Chairman Michael Steele said in a statement. "Rather than putting a stop to 'business-as- usual', this White House has proved more than willing to employ disreputable, backroom, Chicago-style politics in order to further their own political goals."
"President Obama has not only fallen remarkably short of the high standards he has set for himself and his administration, but most egregiously, he has broken his word to the American people about bringing real change to Washington," Steele said.
A spokesperson for the Democratic National Committee was not immediately available for comment.
Washington (CNN) - The Democratic National Committee is putting out a second television commercial that highlights Texas Republican Rep. Joe Barton's controversial apology to BP.
The new ad includes video of GOP Senate nominee Rand Paul of Kentucky, Republican Rep. Michele Bachmann of Minnesota, House Minority Whip Eric Cantor of Virginia, and Barton apparently sticking up for BP, saying the Administration should "stop demonizing BP," that holding the oil company accountable is "un-American" and that the escrow fund is "extortion" and a "shakedown."
Barton, the senior Republican on the House Energy and Commerce Committee, ignited a political firestorm Thursday, during questioning of BP chief Tony Hayward, when he called BP's agreement to set up a $20 billion fund for spill victims "a shakedown" by the Obama administration. And Barton apologized to BP.
Barton's remark drew immediate criticism from Democrats and even Republicans. Under pressure from House GOP leaders, Barton later retracted his apology to BP and said he was sorry for using the term shakedown.
In an e-mail Friday morning to supporters, the DNC asked for donations to begin running a television commercial ad targeting Barton's remarks. The DNC says those contributions led to the airing of a first commercial on national cable TV, which said "Republicans apologizing to BP? Tell Republicans: Stop apologizing to big oil."
The DNC says the new ad, titled "How Republicans Would Govern," will also run on national cable. Democratic officials say the message of the ad is that the Barton apology to BP was not a gaffe or isolated incident but rather the Republican approach and an indication of how the GOP would govern if it wins back control of Congress in November's midterm elections.
(CNN) - Voters will head to the polls in Utah Tuesday, where a Republican Senate nomination battle is grabbing the spotlight.
The contest will be another test of the political strength of the Tea Party Express. The national Tea Party group, which is based in California, is backing and assisting lawyer Mike Lee in the battle to succeed fellow Republican Bob Bennett, who is supporting the other candidate on the ballot, businessman Tim Bridgewater.
Bridgewater and Lee finished first and second last month at the Utah Republican party convention, advancing to the June 22 primary. Bridgewater and Lee touted themselves as more reliable conservatives than Bennett, who finished third in the voting by delegates, eliminating him from advancing to the primary and ending his chances of re-election for a fourth term in the Senate. Bennett became the first sitting senator to go down in defeat in a primary season marked by a strong anti-incumbent sentiment.
Tea Party Express, best known for its three national bus tours, is running radio ads supporting Lee. The group recently pumped more than half a million dollars into the recent fight for the Republican Senate nomination in neighboring Nevada, helping transform former state lawmaker Sharron Angle, once a long-shot, into an easy winner in this month's primary election.
(CNN) – Gen. Stanley McChrystal, America's top commander in Afghanistan has fired a press aide because of the controversial Rolling Stone article, two defense officials tell CNN.
–CNN's Barbara Starr contributed to this report