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 Treasury Department Economic Contingency Plans - White House Press Briefing by Tony Fratto 9/29/08 — Monday, September 29, 2008 —  Q Treasury had been working on a contingency plan for an economic meltdown for over a year. Treasury told me that. Did the White House know this? Did you ever see details of this plan?MR. FRATTO: We work very closely with Treasury. Q So why is it so complex? I mean, why -- MR. FRATTO: It's a complex -- it is an incredibly complex problem. And I think you can see that Treasury was dealing with some very difficult issues: the failure of a major investment bank, the failure of the world's largest insurance company, the failure of two government-sponsored enterprises that needed to go into conservatorship. I think Treasury was ahead of this, but -- I think we said this last week, your first choice isn't a $700-billion-program commitment of taxpayer dollars. That is, I think, a last choice, a major government intervention into the financial sector. That's not what you lead with. You see if there are ways that we can try to contain the problem. That's what Treasury and the Fed tried to do. It had some limited success. But we've seen an incredible transformation in our financial sector right now. But we're in -- we're in a point where because of the tightness in credit, the extreme illiquidity in credit markets, that something major had to be done. And it was the decision of Secretary Paulson. Q But Treasury saw this happening, the possibility -- MR. FRATTO: No. No, the Treasury -- the Treasury was aware of a lot of different potential solutions, and this was one of them. Q They knew a problem was coming, that's why they were looking for solutions a year ago. I mean, why didn't they -- MR. FRATTO: I don't know about a year ago, if that's what they -- if that's what they've told you. But I know that they were looking at different ideas for a long time. But I -- still, I think the point that I made is the right point. You don't -- you don't do this kind of major intervention as a first choice. Q My point is they could have warned the public a year ago that something was coming; they could have talked to Congress. MR. FRATTO: They were warning the public. And they were talking a great deal about the problems in credit markets. And I know it's something Secretary Paulson had been focused on for a great deal of time. And in particular, his focus on Fannie Mae and Freddie Mac as the -- one of the largest players in mortgage backed securities, he had been focused on that for a great deal of time. The administration had been focused on it for six years, even long before the Secretary came to Treasury. Henry Paulson | Press Briefing | Tony Fratto | Treasury Department | Treasury Secretary | Wall Street | White House Press Corps Labels: Henry Paulson, Press Briefing, Tony Fratto, Treasury Department, Treasury Secretary, Wall Street, White House Press Corps
Posted by White House Press Corps @ 5:23 PM
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