Gregg to Geithner: You’re lying

When Judd Gregg abruptly withdrew from his appointment as Commerce Secretary, I wrote that Barack Obama now faced the real risk of having created the most credible critic of his administration.  That nightmare came true on the Hill yesterday when Treasury Secretary Tim Geithner tried explaining Deadbeatonomics to the Senate Budget Committee.  Gregg chewed Geithner to pieces with facts and figures, exposing Geithner and  Obama’s economic policies as incompetent:

In a hearing before the Senate Budget Committee Gregg dressed down Geithner with facts, figures, and charts. While always keeping his cool, the exchange was somewhere between a mother’s scolding, a drill sergeant’s questioning and an attorney’s cross examination.

In his opening statement, Gregg politely called the administration’s budget forecast a lie.

“The argument that it cuts the debt in half in four years is, ahh, is truly spurious,” he told Geithner. …

“The argument that this budget doesn’t have tax increases [on everyone] is, I think, an ‘Alice in Wonderland’ view of the budget,” he said.

He challenged the budget’s math on cutting the debt: “When you take the deficit and quadruple it and then you cut it and half, that’s like taking four steps back and two steps forward. That’s not making any progress; you’re still going backwards.”

The Washington Times reports that both parties have started backing away from Deadbeatonomics, at least as laid out in Obama’s budgeting:

[Sen. Kent Conrad, D-ND] said he has been beset by senators on the floor of the chamber, and they have not been heaping praise on Obama’s budget plan. In fact, they are lodging threats.

“There are so many things in it where I have colleagues coming up to me and saying, ‘If this is in, I’m out,’ ” Conrad confessed. “And I’ve heard that on both sides.”

Conrad, who will be a chief architect of whatever compromise is crafted, has already made public his belief that the budget in its present form does not have enough support to pass the Senate, where it is difficult to stroll down any corridor without hearing either a Democratic or Republican declaring their firm opposition to one of its provisions.

In fact, the Times reports that cap-and-trade may be the first piece to get stripped out of the bill.  As it has taken shape, its provisions have frightened Senators from both parties.  Coal states and manufacturing states don’t want the industry-ending restrictions put in place, and other states don’t want to take home hefty energy price increases in the middle of a recession.

Clearly, Geithner and Obama have lost a lot of credibility on the Hill, and the honeymoon is over even for Democrats.  Judd Gregg makes it a lot easier for Senators from both parties to fight Deadbeatonomics, since Obama himself selected Gregg for his “fiscal discipline” and his independent spirit.  As the President’s man, Gregg has the best position for pointing out that the emperor has no clothes — and apparently no problem in doing so.

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