Sunday, March 22, 2009

Obama defends Geithner, budget

US President Barack Obama, in an interview to be aired Sunday, threw his weight behind his embattled treasury secretary, saying Timothy Geithner would not be allowed to resign.
Should Geithner offer his resignation, Obama told CBS he would turn down that offer and respond: "Sorry buddy, you've still got the job," according to interview excerpts released Saturday.
Geithner has been under fire for his handling of the economic crisis and a political scandal over massive bonuses paid out by insurance giant American International Group, which has received bailout money funded by taxpayers.
AIG dished out 165 million dollars in bonuses to top executives, including some in the division blamed for putting the once-mighty insurer on life support.

US media reported Saturday that the insurance giant had actually paid 218 million dollars in bonuses, over 50 million more than had been disclosed. AIG has denied the reports.

In an interview with the CBS program "60 Minutes" to be broadcast Sunday, Obama said neither he nor Geithner had discussed a possible resignation by the treasury chief.

Obama also defended his 3.55-trillion-dollar budget and his 787-billion-dollar economic stimulus plan, but he acknowledged public frustration with continued economic woes.

"It's going to take a little bit more time than we would like to make sure that we get this plan just right. Of course, then we'd still be subject to criticism," he said.

"What's taken so long? You've been in office a whole 40 days and you haven't solved the greatest financial crisis since the Great Depression," he quipped.

Earlier, in his weekly radio and video address, Obama said he remained committed to halving the deficit within four years and that his administration was scouring every corner of the budget to produce two trillion dollars in deficit reductions over the next decade.

"In total, our budget would bring discretionary spending for domestic programs as a share of the economy to its lowest level in nearly half a century," he said.

"And we will continue making these tough choices in the months and years ahead so that as our economy recovers, we do what we must to bring this deficit down."

The comments came as Congress was poised to begin debating this week the budget Obama's administration unveiled last month.

But the budget stumbled into hurdles Friday when the nonpartisan Congressional Budget Office (CBO) forecast that the deficit could hit 1.845 trillion dollars this year under the Obama proposal, quadrupling the 2008 record shortfall.

The CBO said its latest budget deficit estimate for fiscal 2009, which ends on September 30, would amount to 13.1 percent of the country's total economic output.

Since its early January estimate of a 1.2-trillion-dollar gap, the CBO said the enactment of the stimulus plan, other measures to revive the economy and additional factors had hiked deficit projections for 2009 and 2010 by over 400 billion dollars.

Republicans immediately seized on the report to blast Obama's economic policies. "It's worse than even the most pessimistic predictions for this budget," said Senate Republican Leader Mitch McConnell.

"If there was ever any doubt that the administration's budget spends too much, taxes too much and borrows too much, it's gone."

But Obama was quick to rebut his critics, arguing that his economic proposals offered a long-term solution to US structural problems and not "a wish list of priorities that I picked out of thin air."

The proposals "are a central part of a comprehensive strategy to grow this economy by attacking the very problems that have dragged it down for too long: the high cost of healthcare and our dependence on foreign oil; our education deficit and our fiscal deficit," he added.

Obama urged lawmakers not to shy away from the magnitude of problems they were facing, saying that Americans were watching them and waiting for them 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," he said.

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