mr. geithner to give him -- to keep him informed of what was going on? >> i did. >> okay. there was a e. 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

mr. 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 dree 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 bo

mr. 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

mr. geithner, the financial crisis we're seeing was, in my vi view, due in significant part to poor managementof these companies and particularly contained by the outcome of the management years in the automobile industry who refused to see what the public appetite was and refused to be competitive and thus, jobs have been lost and an industry practically destroyed, that we loved and admired for so many years. well, when we look at risks taken by corporate executives and decisions made, many of these executive pay packages insulate ceos from the risk and again, i may -- i don't want to take you out of your bail, but to avoid this excessive mismanagement, should executive compensation be tied to the long-term health of a company? where do we have a right to interject our views? >> senator, this is a very important issue, and i agree with you that i think although many things caused this crisis, what happened to compensation and the incentives that created for risk taking did contribute in some institutions to the kind of vulnerableity that we saw in this crisis. we need to increase reforms part

mr. 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

mr. 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

mr. geithner today. we will continue taking your calls. eight is open phones, but if you would like to continue commenting on the president's financial regulation plan, you are most welcome to do so. at 9:00 eastern time, we will spend an hour with george will, and nationally syndicated columnist from "the washington post." he also has a column in "newsweek" magazine. until then, your comments on open phones. let me show you some of the headlines about the financial oversight plan, and it will give you a sense of the initial reaction to it. these are not editorials or commentary, these are reporting stores. here is "the financial times this morning." "wall street says it can do business with federal reserve." "the new york times" today has two stories on its business page. "tough or timid?" again, and "the financial times," "u.s. seeks to marry dynamism and safety." "not everyone is cheering said's new role." on the front page of "the washington post," "in triage month, the goal was to expand the fed power that triumphs over other goals."

mr. sperling on the administrator of proposal. >> the two proposals that secretary geithner put forward,the say on pay and the independent calm committees, i do not believe what have a significant cost. it would obviously apply to public companies. hits it does not mandate that there is-- it does not put a mandate. it says that if they come committee, an independent comp committee is going to hire a consultant or council that that committee needs to have the authority and 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 hess to do an analysis of what the differential impact would be. >> thank you very much. mr. moore. >> thank you madam chair. before we learned the $165 million in aig bonuses in march we also learned from new york's comptroller that wall street executives were paid $18.4 billion in bonuses last year. i was troubled by this is especially during a national emergency when the federal government is providing billions of dollars of taxpayers' fu

mr. geithner and miss bear. did you and eight other bank ceos meet with them back in october 13th? >> yes, sir, we did. >> tell us what happened at the meeting. what the documents indicate is that you had -- we had a lot of conversation, discussion about the threat that's been talked about here by just about everyone relative to the mac clause, but it looks like that there was maybe threats here or at least strong suggestions that you initially partake, participate in the t.a.r.p. program. can you tell me about what took place at that meeting and walk me through it, that october 13th meeting? >> the nine chief executives were called by hank paulson or at least i was -- >> let me interject. you said earlier, i believe, too, i forget which member's question, you initially felt your bank and your board did not need any infusion of cash or t.a.r.p. money from the government, is that right? >> yes. >> when did you make that decision as a bank, this obviously was prior to -- >> that's the first reaction that i had to the fact that we were being offered 15 billion was that we didn't need

mr. geithner had the biggest banks come to washington. is that something that you and paulson decided or was that his call? how did that happen? >> my recollection is mr. paulson's decision but we all participate in the meeting. >> mr. lewis and his testimony said the meeting, he described the meeting as the four of you on one side, ceos of the bank on the other, they were given a form to sign where they had to write the amount of t.a.r.p. bailout money they felt was needed or that you suggested. the impression he left with this committee was they had a comply and fact i asked personally did anyone expressed reservations about accepting tax payer money? he said yes, one of the other ceos in fact did express reservations nevertheless they signed that. he also indicated the entire meeting took less than one hour. is that an accurate description will to place in the meeting? >> i think the time was less than one hour, yes. >> he also said did he know what the meeting was going to be about when he came here to washington? he informed the commi

mr. 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

mr. geithner, secretary of the treasury. here is former president bush. so this group forms our new clue travel edition and as we move forward, i think again it is important that the american public know who made the call to force these car companies into bankruptcy, who made the call to lie to 9,000 auto workers at eight plants across the country and who made the call that even though they don't cost anybody any money, we have to close all these dealerships and put people out of work. and you know, i keep hearing, and the gentleman has heard it too, that the -- this task force doesn't want to run the day-to-day operations of chrysler or g.m. but sadly for them, there is a -- an article that appeared on may 11 out of detroit that indicated chrysler wanted to spend $134 million in advertising in the period of its bankruptcy and this unelected task force told them they couldn't spend money on advertising. they finally relented and said, ok, you can spend half of it. but for a bunch of folks claiming they don't want to run the car company, they've set up the

mr. geithner and ms. bair brought the ceos of the largest banks to the treasury department and demanded they except the partial nationalization of their banks. i look forward to learning more about the role in this process as well. thank you again and i would ask for unanimous consent to include in the record majority and minority reports and all documents referenced in those reports. >> without objection, so ordered. mr. bernanke is a longstanding policy that we swear all of our witnesses in. please stand and raise your right hand. do you solemnly swear to tell the truth, the whole truth and nothing but the truth, if so answer in the affirmative. let the record reflect that the witness answered in the affirmative. mr. bernanke, we would like for you to summarize your statement in five minutes and which will allow the members to raise questions with you and of course we have a light there. when it starts out, it starts out on green and then it does to yellow, and then it goes into red. red, meaned staub,

mr. 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

mr. geithner's reception was inaccurate. and may have been a little bit accurate when he spoke at peking university but i never spoke to a group of college students that didn't take me on either. so there is perhaps a disconnect there. but in our discussions with folks from the central bank, and from the ministry of commerce and vice premier wong and others, there is a real desire for cooperating on the economy with the chinese. i want to give you a few assessments and ask a few questions based on those meetings. the first, i guess headline, there is a general concern regarding the potential of inflation in the u.s. but not over the next 12 or 18 months, but beyond that time frame. even then that concern was tempered by an express confidence in the dynamism of the u.s. economy and understanding that the steps we took were necessary and are necessary for our own economic health. a signal in the deficit would be another headline, the chinese seem to be looking for a signal on the fiscal deficit, not that it disappears but decr

mr. 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

mr. geithner is smart. you convinced congress you could go in and clean off these assets and yet ten days after that, after we passed this, i didn't vote about it but ten days after you bring -- don't tell them what the meeting is about and you have completely clean gd strategies. so did you know before congress voted on it or did you know after congress voted on it that you would not be able to go in and purchase these securities and do what you told us you were going to do? >> we knew after. one of the problems was that -- >> but here is what i want to understand. this was a month-long -- i remember the first conference call we listened into as members of congress was in september. you had a whole month, yet within ten days the strategy, probably a few days -- you had a whole month leading up to this convincing congress you could do this and yet within ten days complete change and yet you're bringing nine banks to washington, not telling them what it's about, not telling them you're going to force them to

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, you're going to have to raise taxes to pay for them. or in the alternative, if you want to reduce taxes, you're going to have to raise other taxes to make up for it. or in the alternative, cut spending. but you've got to balance them up. unfortunately, in his plan, he exempts the 201 -- 2001, 2003 tax cuts, patching the alternative minimum tax, updating physicians payments in medicare -- we all know what that problem is. i don't kno

mr. geithner, blakey said was aware, and was at least aware of an ultimatum to ken w%@@@ @ @ @ )@ @ @ @ @ @ @ @ @ ) >> there are notes from bank of america, the ceo said to fire this person, if you do this, and tim geithner agrees. he was very involved, step by step in the process. he was working for the third party. >> my only association with him during this time was the occasional phone call on the general developments. i was not aware of anything else. >> did you have conversations about his conversations -- you have a conversation with mr. paulson about his discussions with ken lewis because there has been testimony and we have heard that paulson said very clearly that he would fire ken lewis and the board, and it seems to me in the breeding of all this stuff is that the government became one, so perhaps what mr. paulson sd was thought of as coming from you, and there could be some of this coming about. so, confusion coming about after the fact. >> the chairman's time has expired but the witness can answer the question of course. >> could you describe the conversation you had with mr

mr. chairman. ranking member collins. 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

mr. chairman. 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

mr. chairman. last month secretary geithner told this committee the government was going to -- and i use his word "try," that's his word, not to interfere in choosing which plants to close or dealers to close or other specifics of bankruptcy plans. i should also note that he said that he would come directly back to this committee once gm filed for bankruptcy. but i don't see him here today. so i'll ask you the question instead. did the government in any way influence the selection of plant or dealerships to close? >> i could answer that question very directly, senator. the answer is no. >> okay. thank you. for the taxpayers' sake in gm, just to break even, the new general motors will have to get up to a market capitalization of about $70 billion. that is roughly 15% higher than gm's all-time high when there's as a much larger company it was selling high margin suvs as fast as they could make them. it seems pretty clear to me that the taxpayers will never get back their money. so please explain to me how we're going to get our money back if, in fact, general motors' new entity has to get up 15% high

the united states bernanke calls to pull senate in the geithner now and they work out a deal in do something and mr. bernanke takes over credit for american banks and that is that. out the situation in europe is a very complicated, it is no coincidence that each time there is really a pressing financial crisis and everybody runs to the dollar bear go. >> your local community bank of the bottom but yasser. >> before the turn of the millennium, i understand that there were $2.50 for every dollar of its gdp. that would mean that the economy was bankrupt, the dollar meaningless, now you explain with those figures that the economy runs and is still going? >> well, of course, the u.s. economy is a huge economy, the biggest in the world and you have the reserve currency. at lot of people are almost fighting to have dollars and their central banks so as long as the rest of the world believes that the people of parade this money, the federal reserve keep their heads, there is trust in the dollar and you can have that kind of relationship between amounts of dollars moving around in your economy and not getti

mr. pitts: during a speak last week at a beijing university in china, timothy geithner was laughed at when he ensured that the chinese government can continue with their loans with u.s. at the same time federal reserve chairman ben bernanke was here on capitol hill calling for fiscal restraint. every dollar spent by the government is taken from the people in taxes or borrowed against future generations. our nation's fiscal responsibility is so lacking that a developing nation snickers at the mention of sound investment in our debt. traveling the world begs creditor nations allowing us to continue our spending binge is not the kind of international engagement we should make. it will turn around because of our people, not because of out-of-control government spending and borrowing. i yield back. the speaker pro tempore: for what purpose does the gentleman from oregon rise? mr. defazio: to address the house for one minute. the speaker pro tempore: the gentleman is recognized for one minute. mr. defazio: republicans gave us a medicare prescription drug benefit -- complete with doughnut hole ba

>> i think the reason secretary geithner felt it was good to put this on the agenda and the same reason you hear mr. alvarez talking about from the federal reserve perspective that we have all learned painfully the compensation is closely related to the safety and sound obligation that not only the federal reserve but all of us have a and i think we also are aware that one also has to be worried about fighting yesterday's war. new practices, new trends can emerge and i 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 in which too often can get a pass in exactly a bubble atmosphere where again everybody looks mark 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 incense in companies but perhaps at the federal level as well and one of the things secretary geithner did was two actually invite many of the major organizations nonprofits, business groups, to

mr. chairman. >> thank you, senator collins. i will invite my colleagues to make brief opening statements. senator lautenberg, i recognize you. >> thank you very much. 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, r

mr. allison, thank you for taking on this responsibility. i wish you well. what assurances have you been given from secretary geithner and the white house that you will have sufficient ought tautn your decision making for this program? >> senator, first of all, i understand my responsibilities. if i'm confirmed for this position. and my role is to carry out the treasury secretary's directives as well on this program. he and i will be consulting frequently. i know how concerned he is about making sure that these programs are successful. i see him daily about these issues. and those contacts will probay grow even closer if i am confirmed. >> what's your view, if you have one, at the moment of how the treasury, which you'll be right in the central role there, should manage its investments in gm and chrysler? and how long do you believe treasury will be a shareholder of gm and chrysler, if you want to? >> thank you for the question, senator. >> i must say to you that i have not been involved directly in the auto initiatives. and at this point that would have been presumer erpresumtuou confirmed. >> but you plan to get in

mr. allison, thank you for taking on this responsibility. i wish you well. what assurances have you been given from secretary geithnerand the white house that you and the white house that you will have sufficient@@@@@@@ @ @y should manage its investments in gm and chrysler? and how long do you believe treasury will be a shareholder of gm and chrysler, if you want to? >> thank you for the question, senator. >> i must say to you that i have not been involved directly in the auto initiatives. and at this point that would have been presumer erpresumtuou confirmed. >> but you plan to get involved. with both elbows. >> absolutely. i assure you i'll get involved in all the initiatives under the financial stability program. >> well, your number one goal here is to get confirmed. we all here under that. aig, the management of aig, what steps do you believe need to be taken, have you thought about this, for the federal government's oversight of aig? in other words, you got a big bear and you can't turn it loose. it's -- i hope we won't have to put more money into it. i don't know. but it's -- it's -- seems -- i don't know how