Geithner Praises Warren, but Still No Endorsement for Consumer Job

Posted July 22, 2010 at 9:46am

Treasury Secretary Timothy Geithner praised TARP watchdog Elizabeth Warren effusively Thursday to reporters and said she would be an outstanding pick to head a new consumer protection agency.

But Geithner stopped short of endorsing Warren for the job, saying there are multiple candidates and the decision would ultimately be up to President Barack Obama.

“She is one of the most effective advocates for reform in the country,” Geithner said at a breakfast hosted by the Christian Science Monitor, where he also added that she early on saw the problems in financial markets. “She was ahead of most of the country. … She would be a very strong leader of this bureau, but that is a decision that the president will make.”

Geithner has been trying to defuse reports that he has been trying to sabotage Warren for the job because of her tough questioning of him during hearings before the oversight panel Warren chairs, along with Warren’s tough criticism of the big Wall Street banks.

Geithner also dismissed the prospect that Republicans would be able to repeal the financial reform law, as has been proposed by House Minority Leader John Boehner (R-Ohio). “I don’t think there is any risk of that,” Geithner said. “This became law because Republicans decided they could not block it.”

Geithner said there was “no credible argument that the American economy would have been better off leaving that system in place.”

He defended the administration’s handling of the crisis, and said the economy has recovered much faster in the United States than in other parts of the world as a result. He noted the costs of the TARP to the Treasury would end up far less than originally predicted, and said the economy now had four straight quarters of a “relatively healthy rate of growth.”

But he said there remained deep scars from the crisis that will take time to heal.

And he dismissed criticism from the business community, saying that its calls for more tax cuts and less regulation are particularly surprising.

Next up on his legislative agenda, he said, would be a reform of Fannie Mae and Freddie Mac and the system of housing finance, with the aim of getting a plan together by early next year.

Republicans have charged the twin giants were chief culprits in the crisis and ripped Democrats for not including them in the broader reform package.