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Confirm Geithner; Approve The TARP Funds, and Get The Stimulus Right

Thursday, January 15, 2009  |  posted by Hugh Hewitt

Flying back to California from D.C. last night on Jet Blue I watched a few hours of the panels on the financial stations chewing over the dispiriting retail news from December, the illness of Steve Jobs, the vote today on the second release of the TARP funds, and of course the confirmation troubles of Treasury nominee Timothy Geithner. Because I had spent part of the morning in the Oval Office with other broadcasters and President Bush reviewing the past eight years, the contrast between what I had heard the president describe and what I heard the commentators churn out was immense. The outgoing president, like the president-elect who will soon follow, doesn’t have the luxury of endless debates about what to do. Unlike the talking heads of which I am one, whose job it is to mull and opine, presidents have to decide. President Bush has had to act on limited options with incomplete information to make concrete choices in the here and now. The pace of the modern presidency is simply incredible, and it requires extraordinary balance not to be overwhelmed by the continual rush of decisions, the vast majority of which have extraordinary consequences attached to them.

Which is why the Senate should move quickly to confirm Timothy Geithner. A president deserves his cabinet choices because he has won the election and been charged with executing the laws. From next Tuesday forward, it will be the president-elect who faces the incredible velocity of decision making at 1600 Pennsylvania. Barack Obama will need every advisor he can rely upon to be in place and working from the moment he assumes office. Absent a truly disqualifying lapse in judgement by a nominee, a president –especially one just taking office and especially at a time of great economic uncertainty– deserves the team he has chosen to rely upon. The markets reacted psoitively to the choices of Lawrence Summers and Timothy Geithner when they were announced for the key reason that these are very bright men with experience and knowledge of how the economy works. They believe in markets and in the soundness of the American economy. These choices reassured Wall Street and Main Street that the new president would be guided in his key economic decision making by genuinely talented senior advisors.

Timothy Geithner’s mistakes are not small things, but neither are they remotely the sort of character or judgment flaw that should prevent his quick confirmation. He was paid in an unusual way by the IMF and his accountant gave him bad advice. When the IRS caught the error, Geithner did not apply that lesson to earlier years. He has now paid the money owed. There is no pattern of tax evasion beyond this single, confusing set of circumstances, no suggestion in a very public career of the sort of character flaw that would give senators pause. Instead, the Senate has before it a very bright and experienced nominee for a critical post at a time of pressing issues. Get on with it, senators, and mark the maturity of the Republicans against the excesses of the past (John Bolton.)

Similarly the Congress should move quickly to approrpiate the second half of the TARP funds. There was bound to be some waste in the expenditure of the first $350 billion, and there has been. But the panic of the fall has subsided, and a bottom was reached. Liquidity has begun to return to the credit markets. Now the bottom is being tested and the worst of ’08′s news is being absorbed. What a terrible time for the Congress to throw another wrench into the works, just as it did when it shot down the first TARP package in October. Markets sunk then because of the recognition that truly the Congress was full of grand-standers with almost no sense of the urgency of that moment. I thought legislators had learned then the lesson that confidence is easily lost and difficult to rebuild. Today will tell us whether October’s very expensive tutorial has to repeated.

As I wrote yesterday, the real focus should not be on Geithner or the TARP funds, but on the massive stimulus plan that will follow: What is in it? What will we have to show for it down the road? It is not an emergency fund for the shoring up of distressed financial institutions, but a massive surge of public spending that can either be put to extraordinary beneficial uses or be wasted on gimmicks and giveaways. The GOP should be putting all of its (limited) power into doing what it can to make the stimulus package genuinely productive, especially of nuclear power production and energy grid improvements. A much-reduced minority has to be very careful in the management of its limited political capital. Shooting at Geithner and sniping at the TARP are not wise uses of that small supply of influence.

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“And What Do We Have To Show For It?” The Nuclear Opportunity Before The New President

Wednesday, January 14, 2009  |  posted by Hugh Hewitt

In that question is the new president’s greatest political danger. He’s about to oversee the spending of an unthinkable $1 trillion in taxpayer dollars ($350 billion in the second half of the bank bailout, and at least $700 million in the stimulus package.) Even if growth returns as expected in the second half of 2009, voters in 2010 and beyond will be wondering, and Republicans will be asking: “Where did it go? What did it buy? What do we have to show for it?”

My first job was as a lifeguard in Niles, Ohio’s Waddell Pool, a WPA project that still serves that city. I was a frequent visitor to Warren, Ohio’s Carnegie Library, another long-lasting monument to expenditures made on the public’s behalf, and every college and university in America is home to buildings bearing names, a vast pile of evidence that if you want to remembered –even if only for a short while– build something.

If President Obama oversees the payout of more than a trillion bucks and cannot point to anything but statistics to show for it in two years, he’ll have a political nightmare on his hands, and he’ll deserve it. The enormous size of the stimulus is a never-before-seen-in-American-history splurge, and the Democrats thus far show no sign of treating it as other than a vast payout to their friends.

If President Obama was to demand the funding for and enabling legislation to kick start the construction of the dozens of new nuclear power plants this country needs, as well as the wind turbines envisioned by T. Boone Pickens and the grid expansion everyone knows is necessary, not only would he be creating thousands and thousands of great jobs, he’d be powering the U.S. up for a second American century. The appropriation is only the first step. He’d need not a car czar, but a power czar, tasked with delivering the plants on a schedule and authorized to blow through logjams. To get such a massive and necessary expansion of our power supply underway, he’d also have to have “notwithstanding any other law” language in the appropriations bill, or every one of the new plants would be quickly swamped in the sorts of environmental challenges that bedevil every major infrastructure project in the county. (Here’s just one example –a proposed 88 mile natural gas pipeline from Baltimore to PA, threatened by the Indiana bat and the bog turtle. Those of us who practice law in the world of endangered species and wetlands know this is the rule for big projects, not the exception.)

The good news is that the spending bill that looms is so huge that all but the most ardent environmentalist can be bought off with a set aside of billions for habitat acquisition for any threatened or endangered species impacted by the power project. The unions would cheer; environmentalists would cheer, conservatives who know that energy equals freedom would cheer. Well before he faced re-election, President Obama could point to the massive outline of the next generation’s power supply, a signal achievement with extraordinary multiplier benefits to the economy and national security.

The new president and the Democratic leadership are talking about “green power” and classroom do-overs, the repair of bridges and tax credits for car and home buying. Each of these are fine things, but together they add up to nothing that will be remembered two years from now, and more importantly, to a lost opportunity to have done a great thing.

The Senate GOP should use what leverage that it has to at least force votes on provisions of the stimulus bill that would revitalize the nuclear power industry and quickly build a new generation of nuclear power plants. If President Obama embraces the plan, he’ll reap the political benefit, but the country’s energy security will be greatly enhanced. Hope that he does.

The 2010 Senate Races

Wednesday, January 14, 2009  |  posted by Hugh Hewitt

Senator John Cornyn, the new head of the National Republican Senatorial Committee joined me yesterday to look ahead to 2010. The transcript is here.

As I write in my new book, GOP 5.0, every activist ought to begin a monthly contribution to the NRSC and the NRCC. Even $5 a month begins the rebuilding that has to commence immediately.

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