WASHINGTON – U.S. Sen. Olympia Snowe of Maine told Treasury Secretary Tim Geithner Tuesday morning that “Rome is burning” as Geithner and the Obama administration fiddle with the economy and disregard the true needs of “Main Street.”
The exchange between Snowe and Geithner was the latest round in a bout that stretches back to February, when Snowe charged that the Obama administration’s job creation policies were inadequate and that the economic recovery was faltering. Geithner responded that she was being “a little dark and pessimistic” in her characterization of the state of the recovery.
Snowe then offered up a bit of an “I told you so” to Geithner in July when the when news emerged indicating anemic economic growth for the second quarter.
The latest confrontation occurred Tuesday when Geithner appeared before the Senate Committee on Small Business to discuss the status of a small business lending initiative that Congress passed last year.
Snowe – as did several other Republicans on the committee – used the appearance to contend that the White House’s economic policies – including President Obama’s proposed $447 billion jobs package – are failing to prompt businesses to hire many people and make a dent in the unemployment rate.
Plus, the $30 billion lending program that was part of the small business bill was a failure, Snowe asserted, because only $4 billion has loaned and much of that went to banks that used the money to pay off previous federal bailout funding rather than winding up made as loans to small businesses hurt by the credit crunch.
Business owners tell her, Snowe said, that reducing federal regulations and a comprehensive overhaul of the tax code are what they need to provide the certainty and confidence to being hiring again.
She said that temporary tax breaks given to businesses, part of the Obama jobs plan, don’t provide what businesses need, either.
“When one remedy after another fails to solve the crisis, it is long past time for the alarm bells to sound for Congress to address what exactly is imperiling the small businesses we depend on to create jobs,” said Snowe, who is up for re-election next .
Snowe attacked Geithner and the administration for lacking any “tempo of urgency” in dealing with long-term fiscal issues, saying, “Your job is to craft the economic policy of this country and, at this point, it isn’t working.”
Geithner acknowledged that addressing long-term issues such as tax reform is important, though he contended that the Obama administration already is working on examining what federal regulations can safely be scaled back or eliminated.
But Geithner says that short-term measures such as temporary tax breaks are important as long-term issues begin to be worked on, and contended that the economic evidence doesn’t bear up Snowe’s argument that regulatory burdens and the current tax code are impeding job growth. What businesses need to begin hiring is to see greater demand for their goods and services, and that happens in the short-run by taking needed steps to spur the economic recovery, Geithner said, adding that the most important issue is how to increase immediate economic growth.
Saying lawmakers should not “lose sight of the near-term imperative,” Geithner urged a focus on “things that have traction right now.”
Geithner also defended the small business loan program that was the hearing’s focus. He said the program was working as designed, that architects of the legislation that passed last year realized banks would use it to pay off bailout money, but contended that too frees up credit for small businesses. It’s difficult to force banks to lend, but the program gives needed tools to improve access to credit, Geithner said.
MaineToday Media Washington Bureau Chief Jonathan Riskind can be contacted at 791-6280 or at: jriskind@mainetoday.com
Twitter: Twitter.com/MaineTodayDC.
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