- The Washington Times - Wednesday, February 25, 2009
UPDATED:

President Obama on Wednesday afternoon outlined a regulatory reform agenda the White House says is needed to prevent a total fiscal collapse, and said that free markets “do not give us free license to take whatever we can get, however we can get it.”

Even as the administration moved to shore up the financial system, it disbursed an initial chunk of funding from the $787 billion stimulus bill, though for the first time officials warned of potential problems in spending the money properly.

Mr. Obama’s financial regulatory agenda says that institutions critical to the nation’s financial health “should be subject to serious oversight by the government.”

Mr. Obama and Treasury Secretary Timothy F. Geithner believe the only way to improve the economy and prevent future collapses is to “embark on comprehensive regulatory reform.”

The president’s economic team will be offering recommendations to Congress for legislation to be presented in the coming weeks.

“We now know from painful experience that we can no longer sustain 21st-century markets with 20th-century regulations,” Mr. Obama said.

The president also said that strong financial markets “require clear rules of the road,” not as a hindrance to banks, but as protection for consumers and investors.

The aim is to prevent crises by “restoring accountability, transparency and trust in our financial markets,” Mr. Obama said.

“We will not always see eye to eye in this work. We may disagree — and disagree strongly — about particular provisions,” the president said before outlining “core principles” for the proposal.

He said that financial institutions posing “serious risks” to the markets must be subject to “serious” government oversight and active monitoring.

Mr. Obama wants to modernize the regulatory structure, add transparency and “plain” language to rebuild market trust, and hold “responsible” those executives violating the public trust. He also believes the fiscal crisis is a global problem and that he would “challenge” the international community to follow suit with new regulatory standards.

Vice President Joseph R. Biden Jr. on Wednesday morning held the first stimulus plan implementation meeting, saying the recovery bill was just “the first step.” He said he would hold states accountable for spending the stimulus funds, but acknowledged it’s “a problem” that second-tier staff at government agencies are not yet in place.

Earl Devaney, a former Interior Department inspector general who recently was appointed chairman of the Recovery Act Transparency and Accountability Board, echoed the concerns about procurement. He said the government has the same number of staffers tasked to deal with more than $500 billion in contracts that it had to deal with a meager $220 million at the beginning of the decade.

“The procurement staffs have not risen in the departments; they’ve stayed the same,” he said. “So that will be a major challenge for all of the secretaries to address, to make sure that the staff is available to make this happen quickly and to monitor it once it goes out.”

Office of Management and Budget Director Peter Orszag said the administration needs “sufficient numbers” of officers to “oversee the money flowing through the system and to make sure that it is well spent.”

Mr. Orszag said the first $15 billion was given to states for Medicare payments for children and seniors, and he announced the Department of Housing and Urban Development on Wednesday is awarding $10 billion to state and local governments.

The money is for projects making public housing more energy efficient, making improvements in affordable housing and funding the program to remove lead-based paint, he said.

Mr. Orszag said that in the next few weeks states will get floods of funding for food stamps, unemployment insurance, low-income housing tax credits, law enforcement grants and transportation funding.

He said states will not be allowed to put their stimulus cash into rainy-day reserves or to pay for projects that are “basically already done.”

“We’ve never been in a position where this much money with this much need with this much urgency is available, and the need for us to follow the money in ways we haven’t done before,” Mr. Biden said.

Mr. Orszag later added the Web site Recovery.gov tasked with tracking the funds is getting 3,000 hits per second.

Mr. Biden asked the Cabinet secretaries gathered for the meeting to let him know if they run into bureaucracy speed bumps, and added he would chastise governors if the money isn’t spent.

“I’ll tell you what, the moral disapprobation of this office will be used if the money is not being out there spent,” the vice president said. “I’m going to go on television and say: ‘We gave so-and-so X amount of dollars, and nothing is happening. Why hasn’t it happened?’”

LOAD COMMENTS ()

 

Click to Read More

Click to Hide