geithner who is responsible. and that the chairman of the fed.e problem you have is that they gave the banks too good a deal. bailey got back $60 billion after $700 billion or so. that is less than 10%. there was some interest, but we should have gotten a reduction in credit card fees. we should have gotten some permanent reduction on usury fees on credit cards, and a limit on interest rates on those for at least a few years. i am not -- they did not take into account also all the bad assets still on the books, but assets still on the books, but at least that they are sho

they will hear from secretary of the treasury geithner. we will begin to ask him questions today about just how he sees this all working. but very very import or and fundamental is that, look, there is going to be a shift, and the financial institutions in this country, those over which we do have oversight -- fdic, federal deposit insurance corp. -- and those that we don't, are going to have to companies scrutiny and underneath new rules and regulation. i have been here for 17 years. every year the republicans say less regulation, less regulation. that is what is good for the economy. let's stimulate our capitalist system. do not worry, it will work itself out. now there are millions of americans trying to figure out, do i work until i'm 70, 75? do i never retire? americans are losing so much of what they have worked for, and we cannot allow that to happen again. we just cannot keep bailing people out. fundamentally, when you look at this proposal, it is a response to -- you know, they keep saying there are financial institutions that are

i think that we all have put our money on secretary geithner. leading this morning's discussion is one of our company's most thoughtful journalists. he is the 16th managing editor. he is a steward of our long term commitment to journalistic excellence. in conceiving this interview series, we were motivated by the realization that it is good to read and watch cnn on tv, but in this high-tech world, there is nothing like it face to face discussion to get not only the ideas, but the thinking behind the ideas. please join me in welcoming the 75th treasury secretary of the united states, the honorable timothy geithner. [applause] >> let's get right down to it. you have an up and laying out the new regulatory framework of the united states. >> we have -- we had a system that proved too fragile that undermine the great strength of this country. we had a financial system that was the best of the work -- in the world at taking the savings of the people around the world and channeling them to the best ideas. our system is still good at that, but it was to

mail from tim geithner on december 20 at 8:02 in the morning. are you all over b of a/ml and are you getting what you need from the troops? this was to kevin roersch. now, this e-mail sort of raises to me that while mr. geithner was concerned, and we have another chain here that says that he's basically washed his hands in concern for potentially tough confirmation hearing, makes sense, but seems to me that he was all over this. is that your impression? >> no, my impression was he was informed about the general situation but i would assume that what he meant the troops he was referring to the staff at the new york fed where he was still the president. but i should say to the best of my knowledge, he was not involved in the detailed negotiations that developed the package for bank of america. >> you know, in an e-mail, we know from a subpoenaed e-mail from the fed that mr. geithner was, like you said, aware, and was at least aware of an ultimatum to ken lewis as well. he says can't m.a.c. have to close. there's also notes from bank of america wit

first, wasn't to thank presidi t obama and treasury geithner to asking know serve. and the staff and your time for acquainting me with your perspectives on the crisis and the measures to address it. before i review my background and my plans for the office of financial stability if confirmed, i want to thank my wife, again, of 35 years and my sons john and andrew for their steadfast support support over those years. i began my career as the chairman said as an officer in the u.s. navy, spending four years in active duty including a year in vietnam. after attending business school, i joined merrill lynch and spent 28 years leaving as president in 1999. the merrill i held many positions in finance, human resources and investment banking and capital markets and general management. in 1998 i played a central role in unwinding long-term capital management, the hedge fund that a decade ago presented a systemic risk to our banking system. i learned from my experiences at merrill that the long-term success of financial institutions includes sound corporate governances inclu

geithner, to keep him informed of what was going on? >> i did. >> okay. there was an e-mail from tim geithner on december 20 at at 8:02 in the morning. are you all over the of a/mo and are you getting what you need from the troops? this was to kevin. this e-mail sort of raises to me that, while mr. geithner was concerned and we have another jane here that says that he has basically what is hands in concern for a potentially tough confirmation year makes sense. but it seems to me that he was all over this. is that your impression? >> no, my impression was that he was informed about the general situation. i would assume that he was referring to the step of the new york fed for he was still the president but i should say to the best of my knowledge he was not involved in the detailed negotiations that developed

secretary geithner said as these banks start paying back, at least initially was his attempt to take back not only -- let them repay but also kind of wash out the warrants or buy back or sell back the wants rran warran. that we think through an overall strategynd policy goal for our repayments, and what i'm particularly concerned about is the warrants, the american taxpayers we as shareholders and investors took an awful lot of upside -- or downside risk exposure. i'd like to see some of the upside here. none of us want to be long-term holders of investors in financial institutions, but my hope would be that, one, you'd have an overarching policy in terms of repayments. that, secondly, one thing you would consider, and we raised this with secretary geithner, while we, the federal government, may not want to hold those warrants too long because we don't want to have that potential even hint of political interference, i would hope we would at least consider some other options rather than selling them before we got full value which might include setting up a trust or selling them to a t

welcome, secretary geithner. everybody knows over the past year we've had a major economic storm raging and what great damage to everybody. the federal government has responded to the economic crisis with aggressiv and unprecedented, but unfortunately, i believe ad hoc, actions to taxpayer-funded bailouts are too big to fail private corporations, a trillion dollar stimulus, foreclosure rescue programs to name a few. we've seen positive signs of green chutes, but there's some wonder whethering they'll wither away with continuing problems in the housing sector and consumer debt remaining high and significant deleveraging occurring in the financial sector and lingering question about the solvency of banks. are we seeing a dead-cat bounce in the markets? economic and financial experts are telling us that economic recovery cannot occur until we've addressed the root cause, the credit crisis and that's what t.a.r.p. was supposed to do, but it got out on the wrong foot last fall, in my view, and it's still there and pre

>> we have been able to get secretary geithner in to testify once. we asked secretary paulson repeat lid. we have asked secretary geithner repeatedly. i remind you, congress did not give us subpoena power. we only have the power to invite. >> so you asked secretary paulson in the first month of existence? >> well, i believe we asked him repeatedly. we asked him in our first month, second month, and third plo. >> so you had one hearing with someone from treasury who is running and implementing treasury, the t.a.r.p., my understand sg one, and then how many hearings have you had with the relationship yents of the t.a.r.p. -- recipients of the t.a.r.p. funds? >> well, we have had various field hearings. >> just a normal congressional hearing trying to determine how they used the t.a.r.p. funds? >> right, i believe that would be our milwaukee hearing.

welcome, secretary geithner. everyone knows over the past year that we have had a major economic storm raging, a great damage to everyone, the federal government. we responded to the crisis with aggressive and unprecedented, but unfortunately at hot, actions through taxpayer funded bailouts corporations to big to fail. -- but unfortunately ad hoc. we have seen some green shoots, but there are some wondering whether those will wither away. consumer debt is remaining high , significant leverage is happening, and the lingering questions about the solvency of banks. are we seeing a dead cat bounce in the markets? economic recovery occur or be sustained and so we just the root cause of the crisis -- until we adjusted the root cause of the crisis. president obama told us in january that we cannot have a recovery until we get the toxic assets out. these are questions i want to follow up with. of the size of the stimulus is now causing questions from the federal reserve. if we get into the position of monetizing our debt

geithner at this point? >> well, i've had very little conversation with -- in fact, i can't recall of a conversation i've had with mr. bernanke in terms of being one on one. i remember council called the federal reserve advisory council and we -- there were 12 of us and we have dialogue with federal reserve, including mr. bernanke in a group setting. >> any interaction with the administration -- >> gentleman from utah, your time has expired. >> my apologies. >> now yield to the gentleman from maryland, mr. cummings. >> mr. lewis, i've listened to your testimony very carefully and you know, i understand and read about you're a great man. i think one of things you have tried to do today is to walk a very thin line. you just heard republicans and democrats say to some degree that whatever was said to you about losing your job and the board being dismissed, basically what we've said is i don't buy it. let me -- i assume the minutes are accurate from your board meetings. these things you vote on. the minutes from

geithner while he was president of the new york federal reserve. people as far as him repulse and did not see it coming. i think there is a search and promiscuity in nor, the notion of too big to fail means they can do anything they like. host: here is a question by the twister. will you offer any words of wisdom for younger folks? guest: let's start with i have an 18 year-old who is going off to the university of minnesota this september. i said you have to learn something useful in college. if you get a liberal arts education when i was young, you could get a perfectly good job as a young executive and have a future. today you have to yet learned a useful skill in college. you need to learn a very useful skill. the other thing i would say is if you want to be an entrepreneur, there really are three basic disciplines outside of the medical profession that defined the world. engineering, finance, and a lot. -- and the law. it is important to learn to of those three disciplines. unfortunately in the united states, you cannot study law as an undergra

then again, you have someone who was in the banking business running it -- and that is geithner. guest: in terms of tim geithner he has been criticized for being a part of the banking industry. he has been a public servant most of his career. he worked as a career professional at the treasury and then at the international monetary fund and then president of the new york fed. so, in terms of his background -- there's a perception since he came from the new york said that he is sympathetic to the banking industry, but his background as not necessarily reflect that. the interesting thing about the calls is that clearly people are not happy with the banking industry. it is never really that popular, but when the economy goes well is not so notice. the problems that have erupted in the past year have led to intense scrutiny. i think there is a real anger at the banking industry and expect some of it will dissipate as the economy picks up. as credit begins to flow more smoothly at businesses and consumers find it easier to borrow, but still, i am sure the anger expressed in these phone

timothy geithner. [applause]

secretary geithner, in your budget there's a financial stabilization reform of $250 million.in front of banking last week herb allison will oversee the t.a.r.p., hopefully, he talked about -- he called it head room. i interpret it as being reserve of $100 billion. can you tell me why we need 250 million in the budget? >> senator, can i just begin by saying i announced this morning that banks have -- we've indicated the banks that the fed has indicated banks repurchase $68 billion of those initial investments and those will be coming back into the general fund. the eesa legislation that is designed that does create additional flexibility to allow us to use those funds if we believe there's a strong and compelling case and since we're -- all those thing are getting better in the financial system, i think to be realistec, there's a lot of risk ahead for us and we need to be careful to remind people that the flexible sit important. in the reserve fund the president put in the budget this additional reserve fund and in the abundance of caution against the possible they we could fa

tim geithner. [applause] >> let's get right to it. you and larry summers have an op-ed in the "washington post" laying out a regulatory framework for the nine states. what is different? >> we have a system that proved too unstable, too fragile, undermined what was the great strength of this country, which was a financial system that was the best in the world at taking the savings of americans and channeling them to the best ideas. it helped finance growing companies. our system is still pretty good at that, but it was fundamentally too unstable and fragile and did a bad job at basic protection of consumers and investors. those are things we have to change. >> a couple of weeks ago, we are going to do a chart of all the regulatory agencies that exist, but there are too many to put on a chart. >> is a spectacle. >> it seems like the system you are laying out is a bit of a compromise. you're not getting rid of very much and you are putting in a new college of regulators. how's that going to work? >> we are trying to focus on what was at

and we have all heard the president as well as secretary geithner say the government has no desire tobe a day-to-day manager of those companies. it will be a shareholder. and its policies on governance as a shareholder will be made public soon. >> mr. allison, you well know this, we all do, government programs are quite often difficult to create and sometimes just about impossible to terminate. the t.a.r.p. has a statutory termination date that can be slightly extended. >> yes, sir. >> at the request of the treasury secretary. you know this. do you believe that the t.a.r.p. program should ultimately be terminated? and would you have any concerns if the program were converted into some kind of permanent revolving fund? >> senator, i think that's an important question, many americans as well as people in congress are asking. as you said, the program is scheduled to terminate at the end of the year, although it could be extended by an act of the secretary until, i believe, as late as october of 2010. but i think it's important to point out that the programs within the financial stability

presided over the dismantling of glass stiegel and started this whole financial crisis, the -- tim geithner and larry summers just have come back to the white house without any kind of problem. it is almost as if fdr had brought back herbert hoover's secretary of the treasury. that would have stunned the country. it is kind of stunning to not seek a wider range of people for information. host: some of the mistakes is the president's decision to leave the reordering of the financial world to timothy geithner and larry summers. they played a major role in bringing on the disaster in the first place. you say it is not too late to

greetings, secretary geithner. you have taken on a formidable task and so far i think this ball game certainly is going your way but we are quite a distance from the ninth inning. as we meet today, the economy's slowly beginning to show signs of a possible recovery and the challenges still remain. this recovery will require strong reforms to face our financial system on a firm footing. we have got to give the regulators the tools that they need to predict and prevent financial crisis. we have got to change corporate culture that says the people, the leadership at the top, can often take its compensation without regard for what happens with the employees or future investing or the wellbeing of the company and taxpayers. i am still on the board at columbia business school. i was out of the senate for a couple years, took the hiatus, and what i proposed was that salaries at the top be related to salaries at the bottom and instead of letting the ratio split as it has from 40 times typically in the '80s to 400 times, re

one of the key things we expect secretary geithner to testify about is the principle that firms should get away from compensation systems, it encouraged people to -- stop the incentives to write these -- to put together financial products that are just leveraging your risk. host: these rules could be codified for companies? guest: it is more principles that regulators can go to a company and say your compensation system, you are encouraging bad behavior without any awareness of whether or not those mortgages will pay out. it will be more principle. for the first time, they are pushing the principle that risk is a problem. host: we will talk about new concept -- executive compensation. florida on our republican line. caller: i have a question. how much is this individual being paid? host: are you talking about the man, mr. feinberg? caller: what is he being paid? guest: it has not been announced yet. once they do that, we will be able to see financial disclosures. host: his term will be special master. north carolina on our independent line. caller: i was curious about with the bonuses

how is it that geithner -- it does not make sense to me. guest: on credit default swaps, this, too, is on the plan. the fed, but regulatory is more broadly are going to take a much closer look at these exotic financial instruments. you can describe them either as an insurance policy or a wager on the behavior of debt. it was the view before the crisis started the credit defaults what actually helps to make the financial system more resilience by spreading dispersing risk around the world. that view has been widely discredited by what just happened. credit the fault swaps were on the table, they are on the agenda. it is also worth noting that one of the guys who was most focus on these was tim geithner at the new york fed. he tried to find ways to make more efficient at the clearing settlement of these incidents. it was here we can say that the fed did not go far enough in trying to understand how this market works and what kind of vulnerability is created for the entire financial system. now they are going to go back and have to do it. host

tim geithner will be there tomorrow starting testimony. there are many pieces that will have to be handled by congress. one is creation of new authorities. the other is giving the fed more power. that is where you will see intensity. particularly in the senate. in the house barney frank is sympathetic to the fed and how it has handled the crisis. the point of view of the obama administration is they feel they need in authority to handle overall systemic risk. they feel the fed is the best they've got. barney frank is sympathetic to that view. there is debate whether it should be a committee who looks at systemic risk. there was debate about whether it should go to someone else or some new agency. and the and you decided you cannot go into a war with the committee. but in the senate there is serious resistance to giving the fed more power. host: virginia beach on the democrats' line. caller: the correction is just incredible. host: what do you mean? caller: -- the corruption. they have at federal reserve -- these people are not independent.

one of the key things we expect secretary geithner to testify about is these principles that firms should get away from compensation systems that encourage risk. they encourage people to write $50 billion worth of credit defaults swaps. it stops them. it stops the incentives to write these. those that leverage risk up to a point, that, you know. it will be principles that regulators can go to companies and say your compensation is them here, you are encouraging bad behavior. encouraging people to write subprime mortgages without awareness of whether they will pale. so, it will be more principles- based. the industry will probably not have much teeth. they for the first time are pushing the principle that risk is a problem host: michael is with us until the top of the hour to talk about this new executive pay oversight. florida, on our republican line. caller: hello. number one, how much is this individual being paid? host: mr. feinberg caller: yes, what is though czar being paid? guest: he has not even been officially announced as such. we will see that in a few weeks. once they do that w

a fed industry dialogue was initiated under secretary geithner's stewardship of the new york fed nearly four years ago. much has been achieved and much more mass been committed to all with the goal of risk reduction transparency and liquidity. these initiatives include increased standardation of trading terms, improvements in the trade settlement process, greater clarity in the settlement of defaults, significant positive momentum towards counterparty clearing, and a more open industry governing structure in our letter though new york fed this month the industry expressed our firm commitment to strengthen the resilience and robustness of the otc derivative markets. we're determined to implement changes to risk management, processing and transparency that will significantly transform the risk profile of these important financial markets. we outlined a number of extends -- steps toward that end. the otc industries are committed to engaging with supervisors globally to expand responsible the improvements made in our business since 2005. we no that further action is required and we pledge o

>> i think the reason secretary geithner felt that it was good to put this on the agenda, and it's the same reason you hear mr. alvarez talking about it from the federal reserve's perspective that we have all learned painfully that compensation is closely related to the safety and sound obligation, not only the federal reserve but all of us have and i think we also are aware that one also has to be worried about fighting yesterday's war. new practices, the new trends can emerge and they think to ask the major supervisors in the u.s. government to take a yearly look for an annual review of what those trends are could be again, one more check against the type of excessive risk-taking that we have seen, which often can get a pass and exactly a bubble atmosphere, where again everybody looks smart because assets are all going up year after year. these are exactly the times when you need to have more risk management in place and perhaps that the federal level as well. one of the things secretary geithner did was actually to invite many of the major organizations, nonprofits, business groups

host: secretary to geithner and other ministers from the g84 meeting in italy over the weekend. ministers way on winding rescue programs. and the wake of your suggestion about european spending, what your thoughts? guest: i think it is not premature to begin to stir talk among themselves. they asked the imf to do a study, how what is it we on wine from all of this spending. people in europe, when i was in france last month, were already talking about when we are going to have this start to cut these deficits because they are getting too big. there is worry now that paying for these deficits will slow growth and the feature because it will drain off money from the economy. and there are examples. the danes, the dutch, and a recent years have dramatically cut their deficits through belt- tightening, a combination of cutting spending and raising taxes, and there are probably lessons to be learned here about how we began to unwind this. that doesn't mean it is time to unwind tomorrow. that is not what the folks at the imf meeting, but g8 meeting in italy were suggesting. but they di

geithner's initial uneasy public performances were not that settling for them. you want the treasury secretary of the united states to come off as granddaddy who inspires confidence. but don't think you see those kinds of performance is any more. and i think it has been reassuring. host: a buehler and princeton, new jersey -- guest: i don't know, i am not in a stock market -- in the stock market's sudden i'm a good advisor on that. host: bruce on the republican line. caller: i just wonder where uc -- i am from wellington where dhl made the decision to close 10,000. we felt it was somebody from germany who made that decision instead of somebody who knew us, most of the people who worked for dhl wonderful people. we thought it was from afar. with so many of us unemployed workers in america now, already the obama administration has made a decision on health reform that is really helped. i just have a feeling that nationally with so much unemployment going on, what is your national field on -- you have 10 percent of america on an unemployed. how does that affect eve

geithner are certainly much more to of a kind and then mr. paulson and mr. bernanke. >> can you explain that? >> well, let's say that i can't -- but i have a kind of look at life that is marked parallel and a look at economics and financial methods that are more comparable. i think it must have been quite difficult situation for mr. bernanke when the financial crisis turned and maybe you can go back in your memory, it took quite a while for paulson and the bush administration to realize that this was really bad. this is not just a minor crisis that would go away in three months' time and i think there have been very interesting articles amongst "the new york times" about what bernanke had to do to convince paulson and other people in the bush administration that this was serious and is needed urgent personal reaction to prevent from getting into something really bad. >> there was a lot of resistance to government intervention in general which now we have seen pretty much told. practically anything goes of the moment is what it seems so what was the source of

like for example in the '50s and '60s. >> geithner has said and when he was a member of the new york fed didn't have any real power to do certain things that would have favored the financial crisis. and lately elias' spencer has been saying that the fed does have a lot of power but it did not have the political will to exercise it and now there have been all these reports about the fierce lobbying effort that the banks and financial institutions are exerting on our politicians to try to make sure that we don't have more regulation so i wondered if you have a perspective on this and your where is bernanke coming from on all this because i haven't really heard him be outspoken about it? >> there is a lot to say on that question. first of all, i think bernanke has always been very careful with respect to speaking on issues that were not really only monetary because there is a huge tradition in the united states and independence of the federal reserve, but congress and will not away tomorrow. with respect to the first part that is one of the reasons why bernanke rather reluctantly space

sperling. >> the two proposals that secretary geithner put forward speed to any independent compensation committees i do not believe would have a significant cost. it would obviously apply to public companies. it does not mandate that and there is coming it does not put a mandate, it says that if you are. if independent comp committees in iras consultant or council that that committee needs to have the authority in funding to do their job without conflicts of interest. so i feel the things we have put forward right now would be affecting public companies, but i share your view that one always has to do an analysis of what the differential impact would be -- >> thank you very much. mr. more. >> thank you madame chair. before the end of the $165 million in aig bonuses in march we also learn from new york's comptroller in january that was executives were paid $18.4 billion in bonuses last year. i was troubled by this news especially during a national emergency when the federal government is providing billions of dollars to taxpayer funds to stabilize the financial sector. now under normal c

length in 2005, 26 and a talk about this in the book in relation to some of the initiatives timothy geithner was involved with and period of the credit derivatives market. the theory somehow in a market all of the actors have a self-interest in the way of long-term and the basic pressures are somehow leading to the system of the whole be giving rationally has not turned out to be true in the credit world. and you can see that in a very tangible way on the issue of settlement in the cbs base because if you had a perfect rational free-market, you have a situation where everything but say i have an incentive to make sure that i have huge backlogs of paper building up in my back office because guess what, that is irrational. maybe we are losing peepers and will have a limbo land. and of course the market group worked with efficiency. the problem was though that when innovation occurs in finance you never actually know which products are going to be successful and which are not and which ones are worth investing in infrastructure and which ones are not until several months after the product is la

geithner and summers protecting wall street? the executive branch has been barking about the too big to fail institutions, but the best they have done is nip at the edges of real reform and fixing what's wrong. did a.i.g. teach us nothing? an institution that is too big to fail is too big to exist. wall street's bailout taught banks exactly the wrong lesson. it taught them be reckless. the u.s. government will make sure you do not take a hit. just keep your campaign contributions rolling our way. look at derivatives in their proposal. why only regulate normal derivatives when the derivatives that got us here are the exotic ones that are being protected from regulation. do we need another credit swap did he backle to teach us that every needs to be regulated? didn't the president campaign on transparency? isn't the best, sunshine? let the sunshine shine on the federal reserve. the federal reserve is responsible for regulating mortgage lending but did the federal reserve act when the f.b.i. warned in 2004 that the subprime mortgag

the article details secretary -- treasury secretary geithner's trip to beijing two weeks ago when he went to reassure china, the world's largest holder of our treasury debt, as i mentioned, that lending money to the u.s. government is still a wise thing to do. he said in the united states, we are putting in place the foundations for restoring fiscal sustainability. in a moment that all americans should consider a wake-up call, mr. geithner was met met with laughter -- laughter -- when he told a group of chinese students that their country's assets in the unitewerevery safe in washi. madam president, i'd like to submit in this "washington post" article for the record. title of it is: "no laughing matter: why the u.s. needs to get serious about long-term budget deficits." the presiding officer: without objection. mr. voinovich: this week, as you know, president obama announced a plan to reenact statutory pay-go. now, what is pay-go? pay-go basically is this, that if you want to spend more money, you either have to find other spending that you're going to reduce, or in the alternative,

now i have repeatedly questioned secretary geithner about the job loss that will be caused. i have asked the administration to prove its claim of saving jobs. and they can't do it. and no one can define what a green job is and how these displaced workers will transition to one. secretary geithner says, quote, this administration believes that oil and gas preferences distort markets by encouraging investment in oil and gas industry that would occur under a neutral system. he says, to the extent the credit encourages overproduction of oil, it is detrimental to long-term energy security. who believes we have enough american-made energy. if we want to move towards renewable energy, as this bill purports to do, we need a transition strategy that involves natural gas. it must be part of that. this administration must stop its attack on american business and american independent oil and gas producers if we're going to make this a reality. the american public deserves a comprehensive energy plan that creates jobs, spurs innovation and unleashes american genius. that's how we'll solv

geithner during this period was an occasional phone call to update him on general developments. i'm not aware of any other involvement. >> two additional things just to wrap up. did you have conversations about paulson's conversation with -- did you have a conversation with mr. paulson about his discussions with ken lewis because there's been testimony and we've heard that paulson said very clearly that he would fire ken lewis and the board and it seems to me in the reading of all this stuff is that the government became one and so perhaps what mr. paulson said was thought of as coming from you. there could be some of this coming about. so confusion comes about after the fact. >> gentleman's time has expired but the witness can answer your question, of course. >> could you describe the conversation you had with mr. paulson about his conversation with mr. lewis? >> he reported back to me that mr. lewis, as i recall, had decided not to invoking the m.a.c. and that laid open the basis for developing the transaction but, again, i never told anyone to threaten mr. lewis. >> thank you

in recent weeks, treasury secretary geithner traveled to china to attempt to ease growing concerns about our ability to pay off our growing debts. when geithner told an audience of chinese students at beijing university that -- quote -- "chinese assets are very safe," end quote, the reports are that this statement drew loud laughter. it really is not a laughing matter for us. it is serious. tough action, not -- quote -- "i'll tell you what you want to hear speeches" -- is what we need. on the state and local front, our economic indicators are equally troubling. on thursday, the rockefeller institute on government issued a report on state personal income tax revenues for 2009. they're falling fast. 34 of the 37 states in the saw declines in tax revenues indicating that it will be increasingly more difficult than expected for states to close their widening budget gaps. i can hear calls for more bailouts, but my question is: who's going to bail out the federal government? these numbers provide the critical backdrop as we consider the new deficit spending included in the keening did i staff

yesterday treasury secretary timothy th geithner and directof the economic council, laurence summers, published an editorial in "the washington post", laying out the broad outlines of their proposals for regulatory reform. i share their views on how we arrived at this moment. and i share the broader goals that they discuss and look forward to working with the administration on comprehensive and timely regulatory reform. however, i want to speak today about one area where i disagree, and that is how to address systematic risk. but let me step back for a moment. mr. president, the magnitude of the events of the past two years strains comprehension. i believe what we've seen over the last couple of years is the equivalent in economic terms of the 100 year flood. millions of families and retirees have lost their financial security. millions of people are out of work. each day we read about more layoffs, more losses, more bankruptcies and too many days more bank failures. we call this a financial crisis. but for the american people it is a very personal crisis of lost homes, derailed caree