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Entries in U.S. Treasury (4)

Thursday
Jun022011

Treasury Agrees to Sell Remaining Chrysler Shares to Fiat

PRNewsFoto/Chrysler Group LLC, Jim Fets(WASHINGTON) -- The Treasury Department on Thursday announced it has agreed to sell its remaining stake in Chrysler Group LLC to Fiat.

Before the transaction is complete, Fiat will pay $500 million to the Treasury and in return will receive 98,461 shares of Chrysler -- or six percent, according to a U.S. Treasury release.  Fiat will also pay $75 million for shares held by the UAW retiree trust.  Eighty percent ($60 million) of that $75 million will go to the Treasury Department, while the remaining $15 million will be paid to the Canadian government.

Treasury Secretary Tim Geithner said Thursday that President Obama's decision to back Chrysler financially "was the right one."

"Today, America's automakers are mounting one of the most improbable turnarounds in recent history -- creating new jobs and making new investments in communities across our country," he added.

Last week Chrysler announced that it was going to repay its bailout loans totaling $7.6 billion earlier than expected.  The automaker filed for bankruptcy just two years ago.

Copyright 2011 ABC News Radio

Tuesday
May172011

Geithner Says Congress Can't Evade 'Responsibility' on Debt Limit

Adam Gault/Thinkstock(NEW YORK) -- In a wide-ranging speech about debt and deficits at the Harvard Club in New York, Treasury Secretary Tim Geithner said Congress should “meet its responsibility” to increase the nation’s debt limit before the Aug. 2 deadline he has set.
 
“It is simply not an option for Congress to evade the basic responsibility to protect America’s creditworthiness,” said Geithner.
 
“The debt limit, of course, relates only to commitments we have made in the past. Rather than debating whether we should pay our past bills and whether default would in fact be so bad; rather than designing schemes to allow us to continue to make interest payments by breaking our commitments to seniors and veterans; we should be working together to narrow our differences on how to solve the causes of future deficits.”
 
The balance of the Treasury Secretary’s speech was spent defining the Obama administration’s position on cutting annual deficit spending and reducing the national debt over the long-term. Of note here, Geithner highlighted the administration’s proposal for a “debt cap” which would lock in deficit reduction targets which, if not met, would lead to automatic spending cuts and tax increases.

Copyright 2011 ABC News Radio

Monday
May162011

Attacking the National Debt: Why Not Sell Off Our Gold?

Stockbyte/Thinkstock(WASHINGTON) -- Some conservatives are talking about extreme measures to reduce the deficit such as selling off government assets like land, real estate or even the 261.5 million ounces of gold -- mostly in Fort Knox -- that the Treasury Department owns.
 
The Treasury Department values this gold at $11 billion, but that’s according to a statute saying the gold should be set at roughly $40 an ounce.
 
But the current market price is actually closer to $1,500 an ounce -- doesn’t that mean we have $392 billion dollars in gold with which we can pay off our debt?
 
First of all, it’s important to consider that at the rate the nation is deficit-spending -- about $125 billion in new debt per month -- selling off all the gold the U.S. government has would only buy the nation three months. And there are serious questions as to whether selling its gold would actually hurt the U.S.
 
Mary J. Miller, assistant secretary of the Treasury for Financial Markets, cautions that a “fire sale” of government assets “would be damaging to the economy, taxpayers, and financial markets. It would harm the interests of taxpayers, and would undermine confidence in the United States.”
 
Why?
 
It would “undercut confidence in the United States both here and abroad, and would be extremely destabilizing to the world financial system.”
 
Miller notes that then-Treasury Secretary James A. Baker said: “President [Reagan] and I are not prepared to take that step because it would undercut confidence here and abroad based on the widespread belief that the gold reserve is the foundation of our financial system, and because the Congress clearly has the power to prevent a default by assuming its responsibility with respect to the debt limit.”
 
When asked whether he would consider selling the U.S.’s gold, President Reagan told his budget director, James Miller, ‘absolutely not.'”

President Clinton’s Treasury Secretary Robert E. Rubin said, “We will not sell the nation's gold supply.”
 
Says Miller: “The infeasibility of asset sales can be illustrated by an analogy: a family that is struggling to make its monthly mortgage payment could try to sell all of its possessions within a week at a garage sale or on the Internet. But, of course, the family would receive much less than the value of its possessions. And once the next month came, the family would still need to make its mortgage payments -- yet all of its possessions would be gone.”

Copyright 2011 ABC News Radio

Tuesday
Apr052011

Geithner: Raise Debt Ceiling or Risk Another Financial Crisis

Lauren Victoria Burke/ABC NEWS(WASHINGTON) -- In testimony Tuesday before a Senate Appropriations panel, U.S. Treasury Secretary Timothy Geithner again emphasized to Congress that failure to raise the country’s debt limit would have “catastrophic” consequences and make the recent financial crisis appear “modest in comparison.”

“Default by the United States would precipitate a crisis worse than the one we just went through. I think it would make the crisis we went through look modest in comparison. It would force us of course to cut critical payments to our seniors and it would be a reckless, irresponsible act to this country. I find it inconceivable that the Congress would not act to increase the limit.”

The Treasury boss then said that if lawmakers do not raise the debt ceiling, it could cause a number of “inconceivable” consequences, such as a dramatic rise in unemployment.

“It would be catastrophic. I mean, if you call into question the willingness of the government of the United States to meet its obligations, you will shake the basic foundation of the entire global financial system. It is inconceivable that America would do that. And of course I am totally confident that Congress will act to avoid that,” Geithner said.

“It will raise dramatically the borrowing costs permanently for all Americans. Every business for a very long period time would face a much higher cost of borrowing. Every family would face a much higher cost of borrowing. Unemployment would rise dramatically. Thousands if not hundreds of thousands of businesses would fail. And of course you would shake the confidence of the world in U.S. financial assets and Treasuries. It would be a deeply irresponsible act, again inconceivable.”

Copyright 2011 ABC News Radio







ABC News Radio