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Gingrich: Bush doesn’t understand fiscal crisis, and treasury secretary should resign
Saturday, September 27, 2008, 02:59 PM
The Atlanta Journal-Constitution
Former U.S. House speaker Newt Gingrich, whose criticism helped spark a GOP revolt against the bail-out of Wall Street proposed by the Bush Administration, predicted Saturday that House Republicans would reluctantly support legislation that permits the federal government to purchase and isolate the tainted mortgages at the root of the current credit crisis.
But Gingrich had harsh words for President Bush, who he said doesn’t understand the situation, and for Treasury Secretary Henry Paulson, who the former speaker said — for the first time — should resign.
The former Georgia congressman also demanded that the final version of be bill be posted on the Internet for 24 hours before Congress votes on the package.
“That will let you flush out the kind of hidden, secret deals that crop up, that the press finds two weeks after something’s been voted on,” he said.
In a solo interview during his American Solutions conference in Smyrna, Gingrich was asked whether House Republicans would bend on the basic issue of government intervention in the market.
Gingrich said:
“They may have to, in the end, tolerate some of this. Because in the end, you have the Democrats desperate for socialism now. You have an administration which, in my judgment, has lost its mind. That gives you two big elements. And you have Senate Republicans desperate to go along. I’m just being truly candid. Because I think the country ought to know what the pressures really are like.
“And you’ve got the House Republicans and John McCain prepared to stand on as much principle [as possible] — but in the end, I don’t think they’re going to be prepared to do nothing. Because they understand that next week, as long as the current situation….stays the way it is, you’re going to have a genuine credit crisis.”
In a discussion about the political impact of the House Republican revolt, Gingrich said history will view it as the moment that Republican presidential candidate John McCain took over the leadership of the national GOP from President Bush:
“I thought when John [McCain] came back, when he made the announcement he was coming back, you in effect had a transfer of leadership. Now, the president hasn’t conceded that.
“The president did a speech today, he did a speech Wednesday night, none of which I think are particularly helpful. Both because his standing now is so low, and because he’s so partisan and because I don’t think any serious person believes he understands this problem.
“Because it’s clear that Paulson and [White House chief of staff Joshua] Bolten, who are both Goldman Sachs alumni, have been giving him a very one-sided, Wall Street view of the world. I’m confident they never looked at eliminating ‘mark to market.’ And I’m confident they didn’t look at loaning rather than buying.”
“Mark to market” is an accounting measure that took effect last year, which forces companies to disclose information about the immediate market value of their assets. Gingrich says it has forced a “spiral” of devaluation; supporters of the practice say that it forces businesses to reveal poor investments, and is a mere scapegoat in the current debate.
One demand made by House Republicans has been a provision that gives the Treasury the power to issue government insurance for mortgage packages, as a way of reducing the upfront cost of the bail-out.
But Paulson, the Treasury secretary, has expressed little interest in this — leaving some to refer to the loan provision as window dressing needed for the sake of House Republican support.
Gingrich was not pleased by Paulson’s lack of enthusiasm:
“It’s a little bit like trying to get the car out of the ditch when the driver is determined to drive it into the swamp. I think Paulson is destructive. I think he ought to resign. I think this is bad for the country. I think his arrogance is unending. I think the fact that he’s saying publicly, ‘Well, you can give me that provision, I won’t ever use it,’ just tells you the bad faith that they have had at Treasury from Day One.
“But you end up in a reality. The reality is the current president, the current secretary of the treasury, the current liberal Democrats — and I think what you’re going to see is that a totally bad deal became marginally bad deal.
“But it’s probably impossible, without the president getting a new secretary of the treasury, to get to a good deal. Which I think’s just tragic, and bad for the country. We’re taking an immediate tummy ache, and we’re in danger of turning it into cancer.”
One year ago, Gingrich announced he would not enter the 2008 race for president.
But twice this year, the former U.S. House speaker has had a large hand in setting the terms of a national debate. This spring, it was the issue of high gasoline prices and off-shore drilling, which McCain and other Republicans have used to force concessions from Democrats.
Gingrich said he got involved in the bail-out issue after a trip to California:
“I was out in Silicon Valley Wednesday, Thursday and Friday, talking to people. It was clear to me that the entrepreneurial venture capitalists out there thought this whole thing was nuts. That Paulson made no sense to them. And I came and began work on Saturday on a series of things. I posted something on National Review Online and I sent it out to my hundred closest friends in Congress.”
Gingrich said he’s got no regrets about bowing out of a White House race. “You don’t have time to learn and think and put this stuff together if you’re the candidate,” he said. |
