WASHINGTON: The Obama administration is “incredibly confident” the US economy will rebound within a year, a top adviser said yesterday, before a critical week in efforts to flesh out and sell the president’s recovery agenda. “We will be seeing signs the economy is turning around,” Christina Romer, head of the White House Council of Economic Advisers, told the “Fox News Sunday” program.
On CNN’s “State of the Union” show, Romer said she had “every expectation, as do private forecasters, that we will bottom out this year and actually be growing again by the end of the year.” President Barack Obama’s steps to reverse a deep recession and restructure the ailing US financial system have global implications as he prepares to meet leaders of major developed and developing nations at a Group of 20 summit in early April.
But Obama’s reform plans and the vast spending envisioned to reboot the world’s largest economy and purge at least $1 trillion in “toxic” assets from bank balance sheets face hurdles from some in Congress and corporate boardrooms.
In two key parts of the agenda, Treasury Secretary Timothy Geithner is expected to unveil long-awaited details of his bank bailout plan today and then on Thursday expand on proposals for financial regulatory reform at a congressional hearing.
One aim of the three-part strategy to cleanse the financial system will be to entice private investors with abundant loans and generous terms to buy bad mortgages and other toxic assets, a source familiar with the plan told Reuters on Saturday.
Obama, whose high approval ratings are being tested in his third month as president as public anger rages over big bonuses at bailed-out financial firms, will discuss his recovery efforts in a prime-time news conference on Tuesday.
Geithner has been attacked over his failure to halt bonuses of at least $165 million, and possibly as much as $218 million, paid out to employees by hobbled insurer American International Group, which has been bailed out with about $180 billion in taxpayer money. Obama has stepped up his defense of Geithner, including some Republican demands for him to quit, telling the CBS show “60 Minutes” taped on Saturday that he would not accept his treasury secretary’s resignation even if it were tendered.
Geithner, who dismissed the calls to step down while taking responsibility for the AIG bonuses controversy, has also been criticized over his slow roll-out of the rescue plans for the banking sector that are seen as vital to an overall recovery.
