New York (CNNMoney.com) - Treasury Secretary Tim Geithner told lawmakers Tuesday that banks that took the most risks during the financial crisis, and required government aid, should pay the most toward recouping bailout costs.
In prepared testimony for the Senate Finance Committee, Geithner said the proposed Financial Crisis Responsibility Fee could raise about $90 billion over 10 years.
"We designed the fee so that it would fall most heavily on firms that fund riskier activities with less stable forms of funding," Geithner said in his testimony, adding that over 99% of banks would be excluded from the fee.
Updated: 10:34 a.m.
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New York (CNNMoney.com) – The U.S. Postal Service is laboring under an outdated business model and needs to cut salaries, close facilities and take other steps to to aggressively slash costs, the Government Accountability Office said Monday.
"USPS's business model is not viable due to USPS's inability to reduce costs sufficiently in response to continuing mail volume and revenue declines," the GAO said in a report. "Given its financial problems and outlook, USPS cannot support its current level of service and operations."
The GAO study was commissioned after the Post Office submitted a proposal to Congress last month to overhaul its business model that included, among other things, the elimination of Saturday mail service.
Over the last three years, the USPS has lost nearly $12 billion as mail volume plunged 17% due to the weak economy and the increasing popularity of electronic mail.
NEW YORK (CNNMoney.com) - Alan Greenspan acknowledged Wednesday that mistakes were made during his long tenure as chairman of the Federal Reserve, but he argued that the low interest rate policy he championed at the central bank didn't inflate the housing bubble.
In testimony before the Financial Crisis Inquiry Commission, Greenspan said the recent financial meltdown was possibly "the most severe in history." He admitted that regulators failed to grasp the severity of the crisis, but he maintained that his policies and predictions were correct most of the time.
"When you've been in government for 21 years, as I have been, the issue of retrospect and what you should have done is a really futile activity," Greenspan said. "I was right 70% of the time. But I was wrong 30% of the time, and there were an awful lot of mistakes in 21 years," he added.
NEW YORK (CNNMoney.com) - Former Federal Reserve Chairman Paul Volcker said Thursday that more needs to be done to regulate the financial system before the lessons of the recent crisis are forgotten.
"We must not shrink away from change but accept the need for basic financial reform," said Volcker, currently chairman of President Obama's Economic Advisory Board, in remarks to the Economic Club of New York.
He said the economy appears to be growing slowly, and that the financial crisis is beginning to seem to some like a "bad dream."
But the magnitude of the crisis showed that the underlying problems are "more fundamental" and require "broad reform" of the financial system, he warned.
NEW YORK (CNNMoney.com) – President Obama on Monday pushed his plans to make the nation's economy more stable in the future by investing in education for high-tech industries.
Speaking at Hudson Valley Community College in Troy, N.Y., Obama emphasized the need to encourage entrepreneurship and international
He also reiterated his call for increased investment in green energy technology, electronic health records and manufacturing advanced vehicles.
"Our strategy begins where innovation so often does: in the classroom and in the laboratory - and in the networks that connect them to the broader economy," the president said in prepared remarks. "These are the building blocks of innovation: education, infrastructure, and research."
The administration says its under its new innovation strategy, $100 billion of economic stimulus funds will be used to support innovation,
additional support for education, infrastructure and other investments.
NEW YORK (CNNMoney.com) - The Senate is expected to vote Thursday on a $2 billion extension of the popular Cash for Clunkers program, as lawmakers rush to finish business before their August recess.
The House voted to extend the program, which blew through its $1 billion in initial funding, before it adjourned for the summer last Friday.
Now the Senate must agree to make the additional money available so that President Obama can sign the extension into law.
NEW YORK (CNNMoney.com) – After nearly 100 days in office, the Obama administration's campaign to lift the economy out of its deepest funk since the 1930s showed no signs of slowing down.
In his 14th week in office, Obama directed his cabinet to cut $100 million in spending over the next few months in a gesture aimed at showing concern about the deficit. He met with credit card companies to press for new consumer protections. And he touted plans to make student loans more affordable.
Next week, the president will mark his first 100 days in office with a prime-time press conference on Wednesday. It will be his third such press conference.
Meanwhile, the administration's efforts to keep the nation's auto industry alive could hit a major roadblock next week.
Troubled automaker Chrysler LLC, which has received billions of dollars in federal loans, could face bankruptcy if it fails to complete a deal with Italian carmaker Fiat by Thursday. Chrysler has struggled to get concessions from its creditors and labor unions.
NEW YORK (CNNMoney.com) - President Obama continued to make the case for sweeping economic reforms this week as he approaches the symbolically important 100-day mark in his presidency.
In a major speech on Tuesday, Obama sought to explain his administration's efforts to simultaneously fight the financial crisis and build a foundation for future prosperity.
He also responded to criticism that he is attempting to do too much and defended his plans to make big investments in education, health care and energy.
Echoing comments made last week, Obama said he sees "glimmers of hope" in the economy. But he tempered that by saying "we're not out of the woods just yet."
"There is no doubt that times are still tough," Obama told students and faculty at Georgetown University. "But from where we stand, for the very first time, we're beginning to see glimmers of hope."
At the same time, Obama sought to frame the debate over how to right the nation's economy as lawmakers return to Capitol Hill next week after a two-week recess.
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NEW YORK (CNNMoney.com) - Treasury Secretary Tim Geithner will host a meeting of international finance ministers next week, the Treasury Department said Monday.
The April 24 gathering of Group of 7 officials in Washington, D.C., will be followed by a larger meeting of Group of 20 ministers.
After a summit in London earlier this month, G-20 member nations agreed to increase oversight of the global financial system and pledged more than $1 trillion to the IMF to help economies in need.
However, certain details of the plan remain unclear and analysts said next week's meetings will likely involve discussion of, among other things, how much money individual members will commit to the IMF.
NEW YORK (CNNMoney.com) - The Obama administration's tenth week in office was a busy one. Treasury Secretary Tim Geithner unveiled the next phase of the bank bailout. Congress took up the president's budget. And the government outlined a plan to overhaul regulation of the financial system.
The administration's efforts, along with some faint signs that economic conditions are stabilizing, helped improve the sentiment on Wall Street. Stocks posted strong gains for the week despite a selloff on Friday.
It was also a busy week on Capitol Hill.
Committees in the House and Senate largely supported Obama's priorities for the 2010 budget, with certain caveats, in the early stages of what is expected to be a months-long debate.
Lawmakers also heard testimony from Geithner on how the administration hopes to prevent future meltdowns by increasing oversight of the financial markets and preventing companies from growing too big to fail.