Timmy Goes Off Script

President Obama officially has a major Tim Geithner problem as the Treasury Secretary continues to throw the administration and Congress under the bus...while testifying to Congress.

Overzealous bank regulators and an attempt by Congress to punish greedy bank executives are combining to restrict the ability of the nation's 8,000 community banks to lend to small businesses, Treasury Secretary Timothy Geithner said Tuesday.

Called to testify before the Senate Finance Committee about the Obama administration's fiscal 2011 budget proposal, Geithner instead spent much of his time discussing why lending hasn't picked up at community banks, often the only lender to small-town America.

"Where is the urgency, Mr. Secretary, in solving this," Sen. Maria Cantwell, D-Wash., demanded of Geithner. "People put the screws to the community banks and gave all the money to the big banks. I'm telling you they are coming into my office every day with these stories, so I would urge you . . . to act now and not wait for legislation."

Sen. Bill Nelson, D-Fla., said he's hearing "cries of anguish" from small businessmen who can't get loans and must close their doors. Kentucky Republican Sen. Jim Bunning turned red-faced as he angrily described how small banks in his state are being hamstrung.

"It's the (federal) regulators that have stopped the flow of money out of the community banks to the small business person, for fear of the (federal) regulators coming in and consuming the bank," thundered Bunning. "They're stopping all lending to the people who absolutely need the lending."

Geithner acknowledged that federal bank regulators who fell down on the job before the crisis now want to appear tough.

"They are now overcorrecting and they're making it hard for them (community banks) to make new loans," said Geithner, adding that he's hearing complaints too. "They say the same things to me."

Correcting the problem, he cautioned, is difficult because bank regulators are independent agencies that don't take orders from the Treasury Department.

At this point, Obama's Treasury Secretary is not only defending the banks, he's on Capitol Hill pushing the other party's talking points, and throwing his own President under the bus on his new plan to get tough with banks. I've been against Geithner from the absolute beginning and have wondered when Obama was going to get rid of him for some time now, but at this point Obama doesn't have a choice.

When your cabinet official is actively sabotaging your directives while testifying to Congress, it's time to show that official the door.  I can understand pushback from the Volcker Rules in private, but Geithner is actively wrecking the President's financial reform agenda that Treasury Secretary he should be supporting.  Instead, he's spouting the GOP line that regulation is the problem, not the solution.  Considering Americans believe the Obama Administration's lack of getting tough with the banks is a major problem, Obama's going to have to make a decision here and damn soon.

It's gotten to the point where Geithner is a Republican appointee when he's going on TV agreeing with Jim Bunning.   Time to discuss his replacement...fast.