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Treasury Secretary Geithner says 'dark forces' trying to starve financial reforms

WASHINGTON — Treasury Secretary Timothy Geithner said Wednesday that some lawmakers and bankers are waging a "war of attrition" against efforts to strengthen regulation of the financial system.

"You're seeing some people run a war of attrition against the reform act," Geithner said at an event in Washington, without identifying the people. "They're trying to starve the agencies of funding so they can't enforce protections for investors."

Geithner also said opponents of the Obama administration are trying to block presidential appointments to regulatory agencies "as a way to get leverage over the outcome, and they're trying to slow down so that they can weaken over time the thrust" of the Dodd-Frank financial overhaul law. "We're not going to let that happen."

Republican lawmakers are opposing the nomination of Peter Diamond to the Federal Reserve Board. The White House renominated Diamond, a Nobel Prize winner, in January, marking a third try at confirmation after the Senate adjourned in December without approving him. Diamond's initial candidacy was returned to the White House in August under a procedural objection.

On negotiations to raise the $14.3 trillion federal debt ceiling, Geithner said Congress will ultimately "do the right thing" and raise the limit. Some lawmakers are using the talks for political posturing, he said.

"Right now this is all theater," Geithner said. "I think the vast bulk of Congress understands it completely. I think there are some people pretending not to understand, who think there is leverage for them in threatening default. I don't understand that negotiating position." Geithner has taken measures to stay below the debt limit until Aug. 2.

This month, 44 Senate Republicans said they would not confirm a director for the Consumer Financial Protection Bureau without changes to its structure and funding. President Barack Obama appointed Elizabeth Warren, a Harvard University law professor, as an adviser to set up the bureau after then-Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, said Republican opposition would prevent her from winning Senate confirmation.

"We want to put up people who can be confirmed," Geithner said. "We want to put up talented people who can do those jobs. Finding the intersection between those two things has become difficult because people are less willing to come and Congress is proving itself unwilling to confirm Nobel Prize-winning economists."

Asked by a moderator at the breakfast held by POLITICO to identify the "mysterious forces" working against the administration, Geithner said, smiling, "dark forces, I would say."

Treasury Secretary Geithner says 'dark forces' trying to starve financial reforms 05/25/11 [Last modified: Wednesday, May 25, 2011 8:58pm]
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