U.S. Treasury Secretary Timothy Geithner was scheduled to deliver his annual testimony before the House Financial Services Committee this morning, but for the second time this year the hearing was postponed.
According to a spokeswoman for the committee, Geithner cited a scheduling conflict due to ongoing national debt ceiling talks, and a new date has not been set. But whenever Geithner does appear before the committee, here are some vital questions he should be asked.
First, if political brinkmanship over the debt ceiling is so unnerving to debt markets, why are yields (the interest rate of return required to attract investors) on Treasury bonds still so low? In April, Geithner went on the Sunday morning talk show circuit warning that the debt ceiling had to be increased without delay. Yet two months later, there still is no agreement on the debt ceiling, and yields on 10-year Treasury bonds are even lower now than they were then, dipping below 3 percent this week. If investors were seriously worried about the prospect of default due to the political disagreements in Washington, D.C., wouldn’t the yield be much higher?
Second, when will President Barack Obama offer a detailed proposal to reduce the nation’s long-term debt? In February, Obama released his 2012 budget proposal, but that document did nothing to address the nation’s debt crisis. In April, after Rep. Paul Ryan, R-Wis., made public his extensively detailed plan to rein in entitlements spending, Obama gave a speech outlining in general terms his thoughts on the need to reduce the debt. But he still hasn’t spelled out how he wants to do it. Even so, the Obama administration is pressuring Congress to raise the debt limit above $14.3 trillion to accommodate new spending.
Third, do you agree with Obama’s assertion that Chrysler has repaid all the tax dollars it owes and more? The president earned three Pinocchios from The Washington Post’s fact-checker for a recent speech in which he said “Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency — and it repaid that money six years ahead of schedule.” By adding the misleading phrase “during my presidency,” Obama thought he could ignore the $4 billion that was loaned to Chrysler in the waning days of the Bush administration, an action he supported at the time.
Fourth, what is Obama’s plan to revive the economy? After 2½ years and spending trillions of borrowed dollars on bailouts, pork-barrel stimulus schemes and potentially inflationary monetary expansion, the U.S. economy is still floundering without sustained growth, job creation or consumer confidence. Unemployment is at 9.1 percent, retail sales have slowed, growth has sputtered, housing prices continue to decline and growing numbers of economists are talking about the possibility of a double-dip recession.
What now, Mr. Secretary? We look forward to hearing the answers.