Treasury Secretary Tim Geithner came to Capitol Hill today to pitch lawmakers on President Obama's $3.8 trillion budget, but found himself defending the administration's economic rescue measures against criticism from restless lawmakers on both sides of the aisle.
"This budget is designed to help make sure that Washington is creating the conditions that allow the private sector to grow and expand, that allow businesses, small and large, to create jobs and make investments," Geithner told the Senate Finance Committee at a hearing this morning.
Obama today is rolling out the latest in a series of proposals aimed at helping small businesses. The new measure would transfer $30 billion in repaid funds from the $700 billion Troubled Asset Relief Program to create a new small business lending fund to be distributed through around 8,000 community banks.
"For the average American, for many businesses, this is still the worst economic environment and most challenging economic environment they have ever experienced," Geithner said. "And that is true even though we have been successful in putting out this financial fire at the center of the system."
But a number of Democrats expressed skepticism that the administration's new small business initiative would work.
"There's a sense that perhaps there's not sufficient sense of urgency in the administration about getting assistance for small businesses and also for community banks, to get that program working better," said the panel's chairman Max Baucus, D-Mont.
"I continue to be uncertain with respect to how this new program is going to improve on two others that your department inspector general has criticized," stated Sen. Ron Wyden, D-Ore.
In a report released last weekend, Neil Barofsky, the special inspector general for TARP, noted that the Treasury Department announced a small business aid program last March but details have "not been announced and no funds had been disbursed."
Sen. Maria Cantwell, D-Wash., criticized the administration for electing to go through Congress with the proposal rather than implement it on their own.
"Where is the urgency in solving this?" Cantwell said. "My point is why wait? Why not come to terms right now with community banks? Because the big banks, somebody came to terms with them and they walked away very happy customers, but small businesses in America are not getting access to capital."
"Nothing would make me happier if small banks want to come today to the programs we have in place today and take capital from them," Geithner replied. "But they have in some ways voted with their feet – hundreds and hundreds took back their applications because of a set of concerns, concerns about terms."
"You should take swift, deft action to implement that immediately," Cantwell told Geithner. "If you don't get it and understand, that's what people in America are angry about. They're angry that that's what happened. The past administration took swift, deft action to help the big banks on terms that some people find outrageous today and now these small banks aren't getting access to the terms that would help small business."
"These aren't unfair terms. These aren't unfair justifications," she said. "But people put the screws to the community banks and gave all the money away to the big banks and if we don't implement change right now, we are going to lose more jobs."