Mr. Geithner delivered broad outlines for a plan to spend the rest of the TARP money last month, with plans to buy up “toxic” bank assets and help homeowners renegotiate mortgages they can’t afford.
But the Treasury secretary was short on details and critics have questioned whether the Obama White House has a specific, workable plan in mind.
“Well, I think fundamentally, the economy is weak,” Peter R. Orszag, director of the Office of Management and Budget, said Sunday on CBS’ “Face the Nation,” though he blamed the George W. Bush administration for that weakness.
“Job losses began in January of 2008. The stock market started declining October 2007. This has been, you know, eight years in the making, and again, it’s going to take some time to work our way out of it,” he said.
Stock prices have continued to decline at sharp rates and unemployment figures for February reached 8.1 percent nationally - up from 7.6 percent in January and 4.8 percent last year.
Mr. Obama cautioned last month that the national economy is likely to worsen before it improves - drawing a rebuke from former President Bill Clinton, who said his Democratic colleague needed to be more optimistic. The president also took criticism last week for dismissing the cratering stock market - it has lost nearly one-third of its value since his election - as “day-to-day gyrations … sort of like a tracking poll in politics, it bobs up and down, day to day.”
The federal government has intervened extensively to rescue failing financial institutions over the past six months, authorizing $700 billion to bail out troubled lending institutions, spending more than $150 billion on the giant American International Group (AIG), and acquiring significant stock shares in several major banks.
Among criticisms of the administration’s early attempts to begin economic healing, particularly in the wake of Thursday’s withdrawals of Annette Nazareth and Caroline Atkinson from consideration for top Treasury posts, it has been noted that the department does not have a single deputy or assistant secretary in place. Thus nobody other than Mr. Geithner authorized to make decisions or speak for the department in negotiations.
On Sunday, Mr. Obama moved to beef up Mr. Geithner’s supporting team, nominating David S. Cohen to be assistant secretary for terrorist financing, Alan B. Krueger as assistant secretary for economic policy, and Kim N. Wallace to be assistant secretary for legislative affairs.
All three currently serve as senior advisers to Mr. Geithner and are subject to Senate confirmation.