Congressional leaders reached agreement on a compromise $789bn stimulus deal on Wednesday as Tim Geithner hit back against widespread criticism that his separate US financial rescue plan lacks specifics.
The stimulus package, which is likely to be signed into law by President Barack Obama by his target date of Monday, is smaller than both versions individually passed by the House and Senate.After days of intense debate, the speed of agreement reflected pressure exerted by the White House to reach a deal. It trimmed tax cuts and health and education spending to keep the figure below $800bn, a ceiling insisted on by moderate Republicans and Democrats in the Senate.
The other countries are also being persuaded to do more to save the global economy. “We will certainly be asking the others about their plans and encouraging them to take bold measures to help sustain the global economy,” the treasury officer is being so.
Earlier, Mr Geithner told the Senate regarding the financial rescue plan: “I completely understand the desire for details and commitments. But we are going to do this carefully.” He left the door open for a request for more bail-out funds at a later date. “We want to be careful before we come to you and ask for additional resourcesor authority that we have done so with as much care and consideration on design as possible,” he said.
Mr Geithner said regulators would use a stress test for big banks under the rescue planto “provide a more realistic, forward-looking assessment” of the losses they might face. This could require banks to step up provisioning.
The rescue plan was still attracting criticism on Wednesday. Ed Yardeni, president of Yardeni Associates, an advisory firm, said Mr Geithner was “an empty suit with an empty plan”. But Lawrence Summers, director of the National Economic Council, said it reminded him of the initially negative reaction to the successful 1994 Mexico bail-out.
Investors said they could be interested in investing in toxic assets alongside the government providing there was attractive government financing and guarantees – but said there was little to go on in Tuesday’s announcement. “I don’t know who, exactly, they’re talking about, or how they’re going to lure people in,” one private equity investor said.
The stimulus package, which is likely to be signed into law by President Barack Obama by his target date of Monday, is smaller than both versions individually passed by the House and Senate.After days of intense debate, the speed of agreement reflected pressure exerted by the White House to reach a deal. It trimmed tax cuts and health and education spending to keep the figure below $800bn, a ceiling insisted on by moderate Republicans and Democrats in the Senate.
The other countries are also being persuaded to do more to save the global economy. “We will certainly be asking the others about their plans and encouraging them to take bold measures to help sustain the global economy,” the treasury officer is being so.
Earlier, Mr Geithner told the Senate regarding the financial rescue plan: “I completely understand the desire for details and commitments. But we are going to do this carefully.” He left the door open for a request for more bail-out funds at a later date. “We want to be careful before we come to you and ask for additional resourcesor authority that we have done so with as much care and consideration on design as possible,” he said.
Mr Geithner said regulators would use a stress test for big banks under the rescue planto “provide a more realistic, forward-looking assessment” of the losses they might face. This could require banks to step up provisioning.
The rescue plan was still attracting criticism on Wednesday. Ed Yardeni, president of Yardeni Associates, an advisory firm, said Mr Geithner was “an empty suit with an empty plan”. But Lawrence Summers, director of the National Economic Council, said it reminded him of the initially negative reaction to the successful 1994 Mexico bail-out.
Investors said they could be interested in investing in toxic assets alongside the government providing there was attractive government financing and guarantees – but said there was little to go on in Tuesday’s announcement. “I don’t know who, exactly, they’re talking about, or how they’re going to lure people in,” one private equity investor said.
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