Prepared Statement by Treas Sec Geithner at the G-20 Finance Ministers and Central Bank Governors Meeting

Prepared Statement by Treasury Secretary Tim Geithner at the G-20 Finance Ministers and Central Bank Governors Meeting
March 14, 2009
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Horsham, UK -- I am very pleased to be in the UK for the G-20 Finance Ministers and Central Bank Governors meeting. I want to compliment Chancellor Darling for his leadership and the excellent work of his staff in preparing for this meeting.

We met to prepare a comprehensive set of recommendations for the meeting of the heads of state early next month. This is a global crisis and it requires a coordinated global response. We have a strong consensus on the need for both recovery and reform so that we never face a crisis like this again.

An effective response to restore global growth requires several things. It requires a sustained commitment to macroeconomic stimulus and pro-growth policies on a scale commensurate with the severity of the problem. It requires aggressive actions to fix our financial systems and get credit flowing again. It requires substantial support from the international financial institutions targeted to those emerging markets and developing economies most affected by the crisis. This means a significant increase in resources – deployed more quickly – to provide financing in support of counter-cyclical fiscal policies, bank repair and recapitalization to increase lending, trade finance, and support to the poorest countries that are most impacted by the crisis.

Alongside these actions must come a clear commitment, when recovery is firmly established, to return to fiscal sustainability and to unwind the extraordinary policy actions needed to restore economic growth and solve the financial crisis.

You are seeing the world move together at a speed and on a scale without precedent in modern times. All the major economies are putting in place substantial fiscal packages. The stronger the response, the quicker recovery will come. That is why the United States has passed the largest, most comprehensive recovery package in decades.

We are each moving preemptively to get ahead of the intensifying pressures that you see across national financial systems and we released today a common framework for restoring the flow of credit.

In the United States, we have launched a new program to help revive the credit markets. We have initiated a forward-looking assessment of the potential capital needs of our major financial institutions, and outlined the terms of the capital assistance program that will provide a backstop for those institutions that need additional capital. We will soon outline our program to use market mechanisms to help clean up the legacy assets on bank balance sheets and bring in private capital alongside government financing to help restart markets for these assets.

As President Obama has said, we will bring the full force of the federal government to ensure that the major banks are able to meet their commitments so that they continue to play critical roles in market functioning and in providing credit to households and businesses.

The G-20 has agreed to the need for mobilizing more resources for the international financial institutions to address the risks posed by the pull back of capital flows and the fall in external demand. The G-20 supports our proposal for a substantial increase to emergency IMF resources through a major enlargement of the New Arrangements to Borrow (NAB) and expansion of its membership. We have asked the World Bank and other Multilateral Development Banks to leverage existing resources by flexible use of their balance sheets to help meet financing needs.

Now turning to reform. The G-20 has agreed on a common framework of concrete changes to the international financial architecture. Risk does not respect national borders. We must establish a much stronger form of oversight and clear rules of the game, more evenly enforced across the international financial system. This will require comprehensive changes both at the national and international levels. The United States will soon be releasing a comprehensive framework of regulatory reform. Our strategy underscores our commitment to encourage a race to the top rather than a race to the bottom; a global move to higher standards.

We have committed to broad principles to guide the reform of the financial system:

First, all institutions that are important to the stability of the financial system should come within a much stronger framework of oversight, with clearer rules of the game that are enforced more evenly and consistently across countries.

Second, all markets, including the derivatives markets, need to be subject to standards for stability and a framework for disclosure.

Third, looking forward we need to provide much stronger cushions of stability to ensure that the framework of capital requirements and accounting standards dampens rather than amplifies future financial crises.

Fourth, we must promote financial market integrity. We welcome Switzerland's announcement to increase information sharing as part of the global effort to end tax evasion.

Alongside this framework, we have expanded membership of the Financial Stability Forum, and we should elevate its role in the international system so that the global economy has – alongside the original Bretton Woods institutions of the IMF, the World Bank and the WTO – a strong institution able to lead these critical efforts to a more robust framework of oversight and standards for the global financial system.

We are committed to accelerating the timetable of reform of the broader governance structure of the international financial institutions to increase the role of developing countries in these institutions.

Let me just conclude by saying that we have a very broad basis of consensus globally on the need to act aggressively to restore growth to the global economy and a commitment to move together to address the evolving crisis.

U.S. workers are among the most productive in the world, but U.S. companies need open and growing markets. As President Obama stressed this week, a healthy United States requires a healthy global economy. Our recovery will be stronger if the world is stronger.

I am very pleased by the progress achieved today on both recovery and reform.

In the WaPo: "Obama's New Tack: Blaming Bush"

Obama's New Tack: Blaming Bush. By Scott Wilson
President Points to 'Inherited' Economy
Washington Post, Saturday, March 14, 2009; A01

In his inaugural address, President Obama proclaimed "an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics."

It hasn't taken long for the recriminations to return -- or for the Obama administration to begin talking about the unwelcome "inheritance" of its predecessor.

Over the past month, Obama has reminded the public at every turn that he is facing problems "inherited" from the Bush administration, using increasingly bracing language to describe the challenges his administration is up against. The "deepening economic crisis" that the president described six days after taking office became "a big mess" in remarks this month to graduating police cadets in Columbus, Ohio.

"By any measure," he said during a March 4 event calling for government-contracting reform, "my administration has inherited a fiscal disaster."

Obama's more frequent and acid reminders that former president George W. Bush left behind a trillion-dollar budget deficit, a 14-month recession and a broken financial system have come at the same time Republicans have ramped up criticism that the current president's policies are compounding the nation's economic problems.

Obama had initially been content to leave partisan defense strategy to his proxies, but as the fiscal picture has continued to darken, he has appeared more willing to risk his image as a politician who is above petty partisanship to personally remind the public of Bush's legacy.

His approval ratings remain strong -- above 60 percent, according to the most recent Gallup poll -- but have dropped from their highs almost entirely because of falling support among Republicans since he took office.

Upon entering the White House in 2001, Bush pinned the lackluster economy on his predecessor, using the "Clinton recession" to successfully argue in favor of tax cuts that won some Democratic support. But for Obama, who built his candidacy on a promise to rise above Washington's divisive partisan traditions -- winning over many independent voters and moderate Republicans in the process -- blaming his predecessor holds special risks.

He will need support beyond his Democratic base as he begins lobbying for his $3.6 trillion budget, which proposes sweeping changes in health care, the energy sector and the public education system. The president did not receive a single House Republican vote for his stimulus plan, prompting some in his administration to view his bipartisan outreach efforts as having little hope of success.

And Republicans have seemed only more emboldened in their rhetoric. Sen. John McCain (Ariz.), for example, recently called the borrowing needed to fund the president's economic recovery plans "generational theft."

"What the administration is involved in now is the politics of attribution," said Lawrence R. Jacobs, a political scientist at the University of Minnesota. "Each week that goes by with falling job numbers and Republican criticism of the administration's flaws means falling approval ratings. What's the antidote? That the guilty party is George Bush."

"The trick," Jacobs said, "is how do you shift blame to George Bush and retain any credibility on the idea that you are looking past partisan warfare? This looks like a doubling down on a very partisan approach."

Rahm Emanuel, Obama's chief of staff, denied that the president has changed his tone toward the previous administration. He said Obama is "not trying to place blame, but he is trying to say clearly: Here's what we've got and here's our way out of it. He's offered a positive alternative to their criticism."

"The truth is that 98 percent of his speeches are about the future, and 2 percent are about inheritance," Emanuel said. "Whereas I think for Republicans it's 2 percent about the future, and 98 percent hope that the people have amnesia."

Until recently, the job of reminding the country of the Bush-era legacy had been left mostly to senior administration officials, and it sometimes ranged beyond economic matters. Referring to the military prison at Guantanamo Bay, Cuba, Vice President Biden said soon after the inauguration that "we're trying to figure out exactly what we've inherited here."

In early February, Secretary of State Hillary Rodham Clinton said that "after I accepted the position, I began looking at the broad array of problems that we were going to inherit," citing the Middle East, Pakistan and Afghanistan in particular.

But most of the Bush-era blame has focused on the economy and the dismal state of the government's finances. Bush's spokesman, Rob Saliterman, declined to comment for this article.
Obama has strengthened his rhetoric gradually. Thomas E. Mann, a senior fellow at the liberal-leaning Brookings Institution, said the administration's "sharpened language is a response to the Republican argument against Obama based on huge deficits and big spending."
Six days after taking office, Obama kicked off an event on jobs, energy reform and climate change with "a few words about the deepening economic crisis that we've inherited." He lamented announced job cuts at such economic mainstays as Microsoft, Intel, Home Depot and Caterpillar, among others.

Just over a week later, Obama, arguing for his stimulus plan, said that "we've inherited a terrible mess," and a few days after that, in the economically depressed city of Elkhart, Ind., he told the audience, "We've inherited an economic crisis as deep and dire as any since the Great Depression."

During a prime-time news conference later that day, he used "inherited" twice in the same sentence to describe the deficit and "the most profound economic emergency since the Great Depression."

This month, Obama has described inheriting "a fiscal disaster" and "a real mess," as administration officials emphasized that the effects of the stimulus package have yet to be seen in paychecks and job-creating public-works projects.

"There's a fascinating behind-the-scenes trend taking place for someone who remains a very popular president," said Ari Fleischer, a former Bush press secretary, describing the decline in Obama's approval ratings and an increase in disapproval numbers. "His response to that trend is to turn up the blame on George Bush and everything that came before him. And he was the one who talked about getting past partisanship."

The economy continues to shed jobs -- 651,000 in February alone -- and the Dow Jones index is roughly 12 percent lower than when the market opened on the day of Obama's inauguration. Perhaps most damaging has been the uncertainty surrounding Obama's strategy to rescue the banking sector, a plan that has been criticized for lacking detail.

Host Chris Wallace asked on "Fox News Sunday" this month, "Can this now fairly be called the Obama bear market?"

House Republican Whip Eric Cantor (Va.) said, "I want to take the president at his word that he wants to work on these problems plaguing American families," adding that "people are looking for leadership."

"It is the Obama economy and the Obama stock market," Cantor said. "This is about today, and he's assumed his post."

Researcher Alice Crites contributed to this report.

ACSH: Likely FDA Appointees Will Face Scaremongers

Likely FDA Appointees Will Face Scaremongers
The American Council on Science and Health, March 13, 2009

Scientists and physicians at the American Council on Science and Health (ACSH) call for the reform of a broken regulatory system -- one that now tries to appease advocates of junk science who pressure the Food and Drug Administration.

These advocates routinely demand that the FDA take unnecessary -- and possibly heath-threatening -- action against alleged environmental risks that have little or no scientific basis. The agency's time is thus wasted chasing phantom risks instead of dealing with real ones, thus indirectly imperiling Americans' health.

Non-risks that (non-science-based) environmental advocates will likely bring to the attention of new senior FDA staff include: bisphenol A in baby bottles, lead in lipstick, formaldehyde in baby shampoo, and pesticide residues in imported foods. These are just a few examples.

Putting these alleged risks in scientific perspective will be one of the most important challenges facing likely FDA Commissioner nominee Dr. Margaret Hamburg and intended Deputy Administrator Dr. Joshua Sharfstein:

•"It's high time, for example, for FDA to take aggressive action to assure people of the safety of bisphenol A in baby bottles, infant formula, and other products that infants and young children come in contact with on a daily basis," stated Dr. Elizabeth Whelan, President and Founder of the American Council on Science and Health. "These products are safe -- and FDA officers should give assurance to consumers -- in spite of the constant attacks by environmental activist groups."

"The mere fact that we can detect trace levels of BPA in plastic bottles or lead in lipstick does not mean a health hazard exists. Indeed, with today's sophisticated chemistry, you can find anything in anything at miniscule levels," stated Dr. Gilbert Ross, Medical Director of ACSH.

•Dr. Whelan noted that although groups including "Health Care Without Harm" have had a petition before the FDA for over two years, asking the agency to require labeling of medical devices containing diethyl hexyl phthalate (DEHP), an ACSH blue ribbon panel chaired by former Surgeon General C. Everett Koop concluded that phthalates as used in medical devices and other products pose no health risk. "Banning these flexible plastic medical devices would set back medicine fifty years," Dr. Whelan noted.

ACSH scientific advocates are hopeful that Hamburg and Sharfstein will address the myth that dangerous chemicals have been allowed on the market. There is no evidence whatsoever that trace amounts of chemicals are linked to the very real health problems the FDA must consider, such as obesity, diabetes, cancer, and reproductive and neurodevelopmental health problems.

Cap and Trade: All Pain, No Gain for Consumers, Economy, Environment

Cap and Trade: All Pain, No Gain for Consumers, Economy, Environment
The Institute for Energy Research, Mar 13, 2009

WASHINGTON, D.C. – On the heels of two hearings in the House today on how an economy-wide cap and trade program might affect working-class American families, Institute for Energy Research (IER) released an analysis that demonstrates that lawmakers’ concerns about the financial burden cap and trade would impose on their constituents are well founded.

“Cap and trade has two goals: increase energy costs and reduce carbon dioxide emissions,” said IER President Thomas J. Pyle. “IER’s analysis clearly shows that cap and trade goes one for two—it is as historically ineffective at reducing carbon dioxide emissions as it is historically adept at raising gas prices and electricity bills. With our economy in free fall and millions of Americans out of work, the idea that lawmakers would enact an unnecessary policy to harm families’ budgets is as irresponsible as it is illogical.”

The analysis shows that cap and trade:
· Is designed to increase the price of 85 percent of the energy we use;
· Didn’t reduce emissions in Europe, home of the world’s only full-scale carbon dioxide cap and trade policy;
· Targets low-income earners;
· Unfairly targets rural economies; and,
· Penalizes domestic and friendly trade partners’ energy resources in favor of Middle East oil.


More from IER on carbon regulation:

· IER Study: Carbon Taxes Reduce Economic Growth & Achieve No Environmental Improvement
· Blog Posting: The Dangers of a “Carbon Fed”
· Press Release: Obama Attempts to Sneak Biggest Tax Increase in History into Budget
· IER Study: Green Jobs: Fact or Fiction?

Weekly Address: President Barack Obama Announces Key FDA Appointments and Tougher Food Safety Measures

Weekly Address: President Barack Obama Announces Key FDA Appointments and Tougher Food Safety Measures

Remarks of President Barack ObamaWeekly AddressSaturday, March 14, 2009Washington, DC
I’ve often said that I don’t believe government has the answer to every problem or that it can do all things for all people. We are a nation built on the strength of individual initiative. But there are certain things that we can’t do on our own. There are certain things only a government can do. And one of those things is ensuring that the foods we eat, and the medicines we take, are safe and don’t cause us harm. That is the mission of our Food and Drug Administration and it is a mission shared by our Department of Agriculture, and a variety of other agencies and offices at just about every level of government.

The men and women who inspect our foods and test the safety of our medicines are chemists and physicians, veterinarians and pharmacists. It is because of the work they do each and every day that the United States is one of the safest places in the world to buy groceries at a supermarket or pills at a drugstore. Unlike citizens of so many other countries, Americans can trust that there is a strong system in place to ensure that the medications we give our children will help them get better, not make them sick; and that a family dinner won’t end in a trip to the doctor’s office.

But in recent years, we’ve seen a number of problems with the food making its way to our kitchen tables. In 2006, it was contaminated spinach. In 2008, it was salmonella in peppers and possibly tomatoes. And just this year, bad peanut products led to hundreds of illnesses and cost nine people their lives – a painful reminder of how tragic the consequences can be when food producers act irresponsibly and government is unable to do its job. Worse, these incidents reflect a troubling trend that’s seen the average number of outbreaks from contaminated produce and other foods grow to nearly 350 a year – up from 100 a year in the early 1990s.

Part of the reason is that many of the laws and regulations governing food safety in America have not been updated since they were written in the time of Teddy Roosevelt. It’s also because our system of inspection and enforcement is spread out so widely among so many people that it’s difficult for different parts of our government to share information, work together, and solve problems. And it’s also because the FDA has been underfunded and understaffed in recent years, leaving the agency with the resources to inspect just 7,000 of our 150,000 food processing plants and warehouses each year. That means roughly 95% of them go uninspected.

That is a hazard to public health. It is unacceptable. And it will change under the leadership of Dr. Margaret Hamburg, whom I am appointing today as Commissioner of the Food and Drug Administration. From her research on infectious disease at the National Institutes of Health to her work on public health at the Department of Health and Human Services to her leadership on biodefense at the Nuclear Threat Initiative, Dr. Hamburg brings to this vital position not only a reputation of integrity but a record of achievement in making Americans safer and more secure. Dr. Hamburg was one of the youngest people ever elected to the National Academy of Sciences’ Institute of Medicine. And her two children have a unique distinction of their own. Their birth certificates feature her name twice – once as their mother, and once as New York City Health Commissioner. In that role, Dr. Hamburg brought a new life to a demoralized agency, leading an internationally-recognized initiative that cut the tuberculosis rate by nearly half, and overseeing food safety in our nation’s largest city.

Joining her as Principal Deputy Commissioner will be Dr. Joshua Sharfstein. As Baltimore’s Health Commissioner, Dr. Sharfstein has been recognized as a national leader for his efforts to protect children from unsafe over-the-counter cough and cold medications. And he’s designed an award-winning program to ensure that Americans with disabilities had access to prescription drugs.

Their critical work – and the critical work of the FDA they lead – will be part of a larger effort taken up by a new Food Safety Working Group I am creating. This Working Group will bring together cabinet secretaries and senior officials to advise me on how we can upgrade our food safety laws for the 21st century; foster coordination throughout government; and ensure that we are not just designing laws that will keep the American people safe, but enforcing them. And I expect this group to report back to me with recommendations as soon as possible.

As part of our commitment to public health, our Agriculture Department is closing a loophole in the system to ensure that diseased cows don’t find their way into the food supply. And we are also strengthening our food safety system and modernizing our labs with a billion dollar investment, a portion of which will go toward significantly increasing the number of food inspectors, helping ensure that the FDA has the staff and support they need to protect the food we eat.

In the end, food safety is something I take seriously, not just as your President, but as a parent. When I heard peanut products were being contaminated earlier this year, I immediately thought of my 7-year old daughter, Sasha, who has peanut butter sandwiches for lunch probably three times a week. No parent should have to worry that their child is going to get sick from their lunch. Just as no family should have to worry that the medicines they buy will cause them harm. Protecting the safety of our food and drugs is one of the most fundamental responsibilities government has, and, with the outstanding team I am announcing today, it is a responsibility that I intend to uphold in the months and years to come.

Thank you.