ABC News’ Matthew Jaffe reports: Only hours after the Obama administration announced a record monthly budget deficit of $220 billion in February, Treasury Secretary Tim Geithner was beating back criticism from Republican lawmakers railing against the rising amount of red ink.
“It just defies common sense for this administration to pretend that you’re paying any attention at all to deficit reduction,” Rep. John Culberson, R-TX, told Geithner. “It doesn’t square with reality.”
Geithner fought back, noting that the Obama administration inherited from their Bush predecessors a severe recession and soaring debt. Spending money to stop the economic downturn, Geithner explained, was necessary, even if it led to record deficits.
“If you care about fiscal responsibility, there is no way you could have argued that the response from the government should have been to stand back and let this economy collapse – that would have been far more costly,” Geithner said.
Replied Culberson, “The level of spending is unprecedented. The level of debt that you’ve asked our kids to pay off is unprecedented. The deficits are unprecedented. We want you to live up to what your words are and we have not seen it yet.”
“You’ve spent more money in less time than any administration in history, you have driven the deficits to unprecedented levels, and you’re trying to sell a bill of goods to the country claiming that you’re going to create the mother of all entitlements, insure 30 million more Americans, and we’re going to save you money,” he continued. “Nobody believes that.”
“The great thing about our country is we get to have a national debate about what makes sense for our country,” responded Geithner.
“And that’s why the November election is going to be a tidal wave,” Culberson fired back.
Geithner today also encountered criticism from Rep. Mark Kirk, R-IL, who accused the Treasury boss of being “naïve” to think that the Ahmadinejad regime in Iran would not use $250 million from the World Bank for non-humanitarian projects.
“I don’t have a naïve bone in my body,” replied Geithner.
At the start of this afternoon’s hearing, Geithner kicked off his opening remarks by applauding Bank of America’s decision to end overdraft fees on debit cards and he urged other banks to follow suit.
“We welcome these efforts by banks to try to begin the process of restoring the trust and confidence of their customers,” Geithner said. “We welcome the fact that we’re now seeing banks try to get ahead of the President’s financial reform effort that is now working its way through the Congress.”
“After years in which we saw many financial companies competing to exploit vulnerable borrowers, it’s good to see banks once again competing to benefit their customers,” he added. “And I want to urge other large banks that have not acted to follow the lead of some of their competitors.”
On the administration’s embattled $75 billion housing help program, Geithner said that “the number that matters now” is not that only 116,000 borrowers have received permanent loan modifications, but that over a million homeowners have received temporary loan modifications.