(Reuters) - Treasury Secretary Timothy Geithner is surrounding himself with former aides to President Bill Clinton as he attempts to rebound from a rocky start even as top-tier vacancies have slowed decision-making.
Former Clinton press secretary Jake Siewert, who has been chief communications officer at aluminum giant Alcoa, is headed to Treasury soon as a senior adviser, sources said.
He will join an advisory team that also includes former Clinton economic adviser Gene Sperling and Lee Sachs, who was an assistant Treasury secretary for financial matters under Clinton.
Stephanie Cutter, who has been Treasury spokeswoman, is headed to the White House for a time to help manage the rollout of President Barack Obama's nominee to fill a vacancy on the Supreme Court.
The former Clinton aides have credibility because Clinton's tenure in the 1990s was marked by a strong economy, though the economic problems they encountered bear little resemblance to the crushing challenges President Barack Obama faces.
For all of their influence, however, there are real limits on the counselors' authority, including an inability to testify before Congress that effectively shifts more of those duties onto the officials who have been vetted by lawmakers.
And there is strength in numbers. The Washington Post reported this week that some key decisions are on hold because of an absence of top-level deputies to Geithner.
One anecdote cited by the Post was that Rick Wagoner was still technically on General Motors' payroll seven weeks after he was ousted as the automaker's top executive.
Nominees have not even been named yet for some posts, like that of under secretary for domestic finance, a key position because that person must help devise strategy for raising the staggering sums of money Treasury will have to borrow to keep the government operating.
Bill Galston, an economic expert at the Brookings Institution think tank who was a Clinton policy adviser, said Geithner's Treasury Department is being slowed by an absence of a top layer under Geithner.
It is a result, he said, of a Senate confirmation process taken to the extreme. The background checks on potential nominees got tougher after Geithner was damaged by the news that he had failed to pay back taxes and Tom Daschle's bid to become health and human services secretary was derailed over a similar issue.
SYSTEM 'ALMOST BROKEN'
"We have at this point a system of nominating, vetting and confirming that is almost broken," Galston said. "We have piled layer upon layer upon layer of reviews, questionnaires, disclosures etc. over the last 30 years that it has now reached a point where even people who are willing to go through the process have to wait around forever."
Still waiting for a Senate hearing is Lael Brainard, another former economic adviser in the Clinton administration who was nominated for the position of under secretary for international affairs.
If confirmed, she would become top financial diplomat for Treasury and take on much of the responsibility for sensitive issues from China currency policy to laying the groundwork for economic summits with other countries.
Read more here
Tuesday, May 19, 2009
U.S. housing starts and permits plumb record lows
(Reuters) - U.S. housing starts and permits fell to record lows in April, weighed down by a slump in multifamily units, according to data on Tuesday that still hinted the U.S. recession may be drawing to a close.
The Commerce Department said housing starts fell 12.8 percent to an annual rate of 458,000 units last month, the lowest since records began in January 1959.
The drop reflected a 46.1 percent plunge in breaking ground for multifamily units and indicated homebuilding remains a drag on the economy. However, starts for single-family homes, rose 2.8 percent, a second straight gain that showed the worst-hit part of the market was stabilizing.
"There is some stability. When you look at the housing starts numbers, they are going to be vulnerable to kind of two steps forward, one step back," said Nick Kalivas, vice president of financial research at MF Global in Chicago. "Housing starts are at a level where they are bottoming out."
Analysts said the decline in starts should help the housing market work through a huge stock of unsold homes and lay the foundation for a recovery from a three-year slump, which was the main trigger of the economic downturn.
Compared to the same period last year, housing starts were down 54.2 percent.
"This is essentially a good thing. It means supply will eventually come back in line with demand," said Joseph Brusuelas, an economist at Moody's Economy.com in West Chester, Pennsylvania.
Shares of U.S. homebuilders fluctuated in choppy trade. The Dow Jones home construction index ended slightly lower following strong gains on Monday after data showed homebuilder sentiment had improved.
In related news, shares of Home Depot Inc, the world's largest home improvement chain, fell 5 percent after the company reported an almost 10 percent drop in quarterly sales.
GLIMMERS OF HOPE
New building permits, which give a sense of future construction activity, fell 3.3 percent to 494,000 units in April, the lowest since records were started in January 1960.
The decline in permits reflected a 19.9 percent decrease in new building plans for multifamily units. Building permits for single family homes rose 3.6 percent.
Compared to April of last year, permits were down 50.2 percent.
While housing activity continues to fall, the report still offered glimmers of hope for an economy in its 17th month of recession, according to analysts.
A National Association of Home Builders survey on Monday showed U.S. home builder sentiment surged to an eight-month high this month, with industry leaders hopeful the slump was nearing a bottom and market stability was around the corner.
Read more here
The Commerce Department said housing starts fell 12.8 percent to an annual rate of 458,000 units last month, the lowest since records began in January 1959.
The drop reflected a 46.1 percent plunge in breaking ground for multifamily units and indicated homebuilding remains a drag on the economy. However, starts for single-family homes, rose 2.8 percent, a second straight gain that showed the worst-hit part of the market was stabilizing.
"There is some stability. When you look at the housing starts numbers, they are going to be vulnerable to kind of two steps forward, one step back," said Nick Kalivas, vice president of financial research at MF Global in Chicago. "Housing starts are at a level where they are bottoming out."
Analysts said the decline in starts should help the housing market work through a huge stock of unsold homes and lay the foundation for a recovery from a three-year slump, which was the main trigger of the economic downturn.
Compared to the same period last year, housing starts were down 54.2 percent.
"This is essentially a good thing. It means supply will eventually come back in line with demand," said Joseph Brusuelas, an economist at Moody's Economy.com in West Chester, Pennsylvania.
Shares of U.S. homebuilders fluctuated in choppy trade. The Dow Jones home construction index ended slightly lower following strong gains on Monday after data showed homebuilder sentiment had improved.
In related news, shares of Home Depot Inc, the world's largest home improvement chain, fell 5 percent after the company reported an almost 10 percent drop in quarterly sales.
GLIMMERS OF HOPE
New building permits, which give a sense of future construction activity, fell 3.3 percent to 494,000 units in April, the lowest since records were started in January 1960.
The decline in permits reflected a 19.9 percent decrease in new building plans for multifamily units. Building permits for single family homes rose 3.6 percent.
Compared to April of last year, permits were down 50.2 percent.
While housing activity continues to fall, the report still offered glimmers of hope for an economy in its 17th month of recession, according to analysts.
A National Association of Home Builders survey on Monday showed U.S. home builder sentiment surged to an eight-month high this month, with industry leaders hopeful the slump was nearing a bottom and market stability was around the corner.
Read more here
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