Obama, voicing outrage, vows battle to block AIG bonuses March 17, 2009
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U.S. President Barack Obama, accompanied by Philadelphia restaurant owner Marco Lentini, right, and Grapevine, Texas, banker Cynthia Blankenship, delivers remarks to small business owners, community lenders and members of Congress Monday at the White House in Washington, D.C.(Gerald Herbert/Associated Press)
U.S. President Barack Obama declared Monday that he will do everything he can to stop insurance giant American International Group ? a company kept alive by huge federal bailouts ? from paying millions in bonuses to key employees.
AIG is in trouble because of “recklessness and greed,” he said at the outset of an appearance to announce help for small businesses hurt by the deep recession.
“It’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay,” he said. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”
Obama spoke in the wake of disclosures that AIG was set to pay roughly $165 million US in bonuses to key people in a unit that sold credit default swaps, risky contracts that caused massive losses for the company.
The company has benefited from more than $170 billion US in federal aid and reported this month that it lost a record-breaking $61.7 billion US in the fourth quarter of last year.
Pointing to the public money AIG received, Obama said he has asked Treasury Secretary Timothy Geithner “to use that leverage and pursue every legal avenue to block these bonuses and make the American taxpayers whole.”
The CBC’s Neil MacDonald, reporting from Washington, said Obama faces populist rage about the AIG situation.
“People are losing their jobs, their personal wealth is evaporating, and then along comes a company that was a disaster, that was part of starting this economic crisis, and it announces that it’s going to pay $165 million in bonuses, some of it to the very people in the financial products section who dreamed up and sold these idiotic derivatives that helped drag the whole world economy down,” he said.
But it is not clear what the president can do, since the Treasury Department appears to think that the employee contracts on which the bonuses are based can’t be broken, he said.
“There is a taste for punishment out there in the American public, and he understands it. But in the end it?s up to lawyers, and in the end Wall Street’s credo seems to be that the ordinary person may win or lose but Wall Street always gets its money.”
Earlier Monday, a leading congressional player on financial issues called for a shakeup at AIG in the wake of the bonus disclosures. Representative Barney Frank, chairman of the House financial services committee, said members of Congress are going to look very closely at the situation
He noted that the Federal Reserve Board was the governmental entity that first gave AIG bailout assistance, and complained that Fed officials did not attach enough conditions to the deal.
Frank said on NBC’s Today show Monday that executives may have a right to their bonuses, but that they don’t have the right to hold their jobs forever.
He added that the government appears to be “rewarding incompetence.”
With files from the Associated Press (more…)
Obama unveils $3.55 trillion budget, says ‘hard choices lie ahead’ February 28, 2009
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U.s. President Barack Obama, flanked by Budget Director Peter Orszag, right, and Treasury Secretary Tim Geithner, talks about his proposed 2010 federal budget on Thursday in Washington.(Charles Dharapak/Associated Press)
U.S. President Barack Obama unveiled a $3.55 trillion US fiscal plan that will hike taxes on the wealthy, revamp Medicare and saddle the country with a massive deficit.
As part of the effort to pull the United States out of a crippling recession, the administration proposes boosting the deficit by an additional $250 billion US this year. That would enable the $750 billion US in increased spending under the government’s rescue program for banks and other financial institutions. The increased spending more than doubles the $700 billion bank bailout passed by Congress last October.
Obama predicts a whopping $1.75-trillion deficit in the current budget year, a figure 50 times the size of Canada’s deficit.
Obama’s fiscal plan will also ask Congress to raise taxes on the wealthy in 2011 and cut Medicare costs to provide health care for the uninsured. Private insurance plans serving Medicare seniors would take the biggest hit.
Obama said the cuts are needed to kick-start an effort to cover all uninsured Americans.
“We must make it a priority to give every single American quality, affordable health care,” Obama told a press conference ahead of presenting his plan to Congress.
“Having inherited a trillion-dollar deficit that will take a long time for us to close, we need to focus on what we need to move the economy forward, not on what’s nice to have,” he said. “There are some hard choices that lie ahead.”
Obama said Thursday he will slash spending by $2 trillion.
“We have targeted almost $50 billion in savings by cracking down on overpayments of benefits and tax loopholes ? that is money going to businesses and people to which they are simply not entitled,” he said.
“And we’ll save billions of dollars by rolling back tax cuts for the wealthiest Americans, while giving a middle-class tax cut to 95 per cent of hard-working families.”
Going into debt in the short term will help restore American business vitality, but Obama said lowering the debt in the longer-term would be the only responsible approach to the country’s fiscal policies.
The blueprint is a 140-page outline, with a fully fleshed out version scheduled for release in April.
But it is only a proposal, which must get approval from Congress, where it is expected to spark fierce debate.
“This budget plan is once again a missed opportunity for American taxpayers,” said Judd Gregg, the top budget committee Republican who was nominated by Obama to join his cabinet as commerce secretary but then withdrew. “It raises taxes on all Americans, implements massive new spending and fails to make any tough choices to control the deficit.”
Among the highlights of the budget:
Health careTrim health-care spending ? which stands at $2.4 trillion a year ? and divert those resources to create a 10-year, $634-billion reserve fund to expand coverage for 48 million uninsured Americans.About half of the fund’s resources would come from cuts in Medicare ? scaling back payments to private insurance plans that serve older Americans, and charging upper-income beneficiaries a higher premium for Medicare’s prescription drug coverage. To raise the other half of the reserve fund, the budget would reduce the rate by which wealthier people can cut their taxes through deductions for mortgage interest, charitable contributions, local taxes and other expenses to 28 cents on the dollar, rather than the 35 cents they can claim now.TaxesExtend the $400 annual tax cut due to start showing up in workers’ paycheques in April, and extend the tax cuts passed in 2001 and 2003 for couples earning less than $250,000 per year. Those tax cuts were due to expire at the end of 2010.Raise income taxes and curb deductions for couples making more than $250,000 a year beginning in 2011, which would allow their marginal rate to rise from 35 per cent to 39.6 per cent.Raise taxes on wealthy hedge fund managers and corporations.Eliminate tax incentives U.S. companies now have to move jobs overseas.Phase out direct payments to farming operations with revenues above $500,000 a year.MilitaryAn additional $75 billion will cover the costs of wars in Iraq and Afghanistan through September, on top of $40 billion already being spent. An extra $130 billion for Iraq and Afghanistan in 2010 and $50 billion annually is budgeted to cover the costs of operations in Iraq and Afghanistan.Climate Change$15 billion a year over 10 years to develop technologies such as wind and solar power, and to build energy efficient cars and trucks.Hundreds of billions of dollars would be raised by auctioning off permits to exceed carbon emission caps, which would be imposed on users of fossil fuels to address global warming. Some revenues from the pollution permits would be used to extend the “Making Work Pay” tax credit of $400 for individuals and $800 for couples beyond 2010.With files from the Associated Press (more…)
I want to grow trade, not contract it: Obama February 23, 2009
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U.S. President Barack Obama and Prime Minister Stephen Harper arrive for a joint news conference during Obama’s visit to Ottawa on Thursday.(Ryan Remiorz/Canadian Press)On his first foreign trip as president of the United States, Barack Obama welcomed efforts by Canada to strengthen the economy and said the two neighbours would work to strengthen the auto industry.
“The work that’s being done by this government to stimulate the economy on this side of the border is welcomed,” Obama said at a joint news conference with Prime Minister Stephen Harper.
“I?ve provided Prime Minister Harper with an assurance that I want to grow trade and not contract it,” he said.
Cross-border trade, Obama-style
Obama picked up a little Canadiana on his way back to the Ottawa airport.
He took a detour to Ottawa’s Byward Market to pick up a BeaverTail. The pastries are dough cooked in canola oil and covered with different toppings, including cinnamon, sugar, chocolate sauce and maple syrup, and in this case, a whipped-cream “O” in the president’s honour.
He plans to eat it at home in the White House.
He also bought some cookies, a keychain and a scarf for his wife.
“We concur on the need for immediate, concerted action to restore economic growth and to protect workers and families hit hardest by the recession through lowering taxes, ensuring access to credit, and unleashing spending that sustains and stimulates economic activity,” Harper said.
The news conference was short on detail, especially since Obama has caused some nervousness in Canada by promising during the presidential campaign to renegotiate North American Free Trade Agreement, a pact among the U.S., Canada and Mexico.
And the “Buy American” provision in the $787 billion US economic recovery plan requires that only U.S.-made iron, steel and manufactured goods be used for public works projects receiving money from the package. However, Obama has acknowledged previously that any purchases must be in line with international trade treaties, such as NAFTA.
Harper said NAFTA gives both countries some leeway in domestic buying but both leaders said as economies around the world face challenges, it’s important for the U.S. and others to resist calls for protectionism.
Stimulus packages
“If we pursue stimulus packages, the goal of which is only to benefit ourselves, or to benefit ourselves, worse, at the expense of others, we will deepen the world recession and not solve it,” said Harper.
‘It?s going to be very important for our government to co-ordinate closely with the Canadian government in whatever approach that we decide to take.’? U.S. President Barack Obama
“We have agreed to stimulus measures not just to stimulate our own economies but recognize that we have a synchronized global recession that requires policies that will not just benefit ourselves but benefit our trading partners at the same time,” said Harper.
“The trade challenges we face in North America are common trade challenges,” said Harper. “They?re not challenges between countries.”
Harper pointed out that in the Canadian stimulus package, some duties were removed on imported goods.
The auto sector
U.S. President Barack Obama and Prime Minister Stephen Harper speak during a joint press conference at Parliament Hill on Thursday.(Jim Watson/AFP/Getty Images)Obama said the two leaders were deeply concerned about the current state of the North American auto industry. He said his economic team was evaluating reports from Chrysler and General Motors on how the companies intend to move forward.
“One thing we know for certain is that there is going to have to be a significant restructuring of that industry,” said Obama.
“When we provided our initial federal help to the auto industry, Prime Minister Harper stepped up and provided assistance that was commensurate with the stake that Canada has in the auto industry,” he said.
“It?s going to be very important for our government to co-ordinate closely with the Canadian government in whatever approach that we decide to take. And we?re committed to doing that.?
Harper said Canada has also been concerned by the “thickening” of the U.S.-Canada border caused by increased security since the Sept. 11, 2001, attacks on the U.S. and the impact it has had on trade.
“The key is to look at how we can look at security in a way that does not inhibit commerce and social interaction,” Harper told reporters.
Canadian businesses have complained that some of the security measures enacted by the United States along the border in recent years have hurt cross-border commerce.
Obama said the leaders discussed how they might use the countries’ economic stimulus packages to ease “bottlenecks” on the border.
“I think four years from now, relations between Canada and the United States will be even stronger,” Obama said.
Trade, energy are key issues for Obama visit February 21, 2009
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Trade and energy will be two of the closely watched topics up for debate as U.S. President Barack Obama visits Ottawa Thursday on the first international trip since he took office.
Obama arrived at Parliament Hill shortly before noon ET for a series of short meetings, photo-ops and a press conference scheduled with Prime Minister Stephen Harper. Obama was to also meet briefly with Liberal Leader Michael Ignatieff.
Trade in a global economic downturn is a key issue, owing to the so-called “Buy American” provision in the $787 billion US economic recovery plan that Obama signed into law on Tuesday. The provision requires that only U.S.-made iron, steel and manufactured goods be used for public works projects receiving money from the package.
U.S. trading partners around the world demanded the clause be withdrawn over fears it could hamper an economic recovery.
During an interview earlier this week, Obama said to CBC chief correspondent Peter Mansbridge that he didn’t think Canadians should be too concerned about the provision.
“My administration is committed to making sure that even as we take steps to strengthen the U.S. economy, that we are doing so in a way that actually over time will enhance the ability of trading partners, like Canada, to work within our boundaries,” he said.
“And my expectation is, is that where you have strong U.S. competitors who can sell products and services, that a lot of governors and mayors are going to want to try to find U.S. equipment or services, but that we are going to abide by our World Trade Organization and NAFTA obligations just as we always have.”
Speaking to CNN on the day before Obama’s visit, Prime Minister Stephen Harper said protectionism presents a huge risk to the world right now.
“There is one thing that could turn a recession into a depression ? it is protectionist measures across the world.”
Obama has tried to downplay earlier suggestions that the U.S. could opt out of NAFTA if couldn’t renegotiate the deal.
“As I’ve said before, NAFTA, the basic framework of the agreement, has environmental and labour protections as side agreements. My argument has always been that we might as well incorporate them into the full agreement so that they’re fully enforceable,” Obama told Mansbridge.
Obama added that with about $1.5 billion in trade flowing across the Canada-U.S. border daily, it is not in anybody’s interest to see trade diminished.
Energy, and Canada’s huge oilsands resources, are also expected to be a topic of discuss for Obama and Harper. The two leaders are expected to announce an agreement that would serve as a preliminary step to a continental cap-and-trade system.
On Wednesday morning, activists from Greenpeace Canada hung a banner from an Ottawa bridge that read “Climate Leaders Don’t Buy Tarsands.”
“What we’re here today for is to urge President Obama to say no to the tarsands,” said Mike Hudema, a campaigner with Greenpeace. “[They're] one of the dirtiest and most energy-intensive sources of oil on the face of the planet.”
The banner was removed later on Wednesday by Greenpeace.
Obama unveils $75B US mortgage relief plan February 19, 2009
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U.S. President Barack Obama unveiled a $75-billion US plan to grapple with the housing crisis that has seen Americans reeling from foreclosures and tumbling home values.
“The American dream is being tested by a home mortgage crisis that not only threatens the stability of our economy but also the stability of families and neighbourhoods,” Obama said during a speech at a high school in Mesa, Ariz.
“It’s a crisis that strikes at the heart of the middle class,” he said.
The rescue plan is engineered to help up to five million Americans refinance their mortgages on properties that are “under water” ? or worth less than the amount owed on the mortgage.
The plan will also contain incentive payments for lenders to give help to up to four million borrowers at risk of foreclosure. The aid is meant to cut homeowners’ monthly mortgage payments back to no more than 31 per cent of their income.
The White House said it will also boost its financial lifeline to Fannie Mae and Freddie Mac, the two U.S. mortgage giants that the administration of former president George W. Bush took over in 2008. The White House said it would now absorb losses of up to $200 billion US at each company.
“All of us will pay an even steeper price if we allow this crisis to continue to deepen,” Obama said.
The housing bailout comes one day after Obama signed a $787-billion US stimulus package into law at a ceremony in Denver. The package, which includes tax cuts, plus money for infrastructure spending, is meant to preserve or create about 3.5 million jobs. Money is also earmarked for education, green technology and health care.
Since the U.S. economy skidded into recession in December 2007, it has lost an estimated 3.6 million jobs.
Obama unveiled his plan on the same day that the U.S. Commerce Department said housing starts and applications for building permits for January fell to record lows.
The U.S. government said starts of new homes and apartments dropped 16.8 per cent last month to a seasonally adjusted annual rate of 466,000 units.
Economists had been expecting an annual rate of 530,000 units. Applications for building permits dropped 4.8 per cent to a rate of 521,000 units, which was slightly below economists’ forecasts.
Obama signs $787B US stimulus package into law February 18, 2009
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U.S. President Barack Obama signs the economic stimulus bill during a ceremony Tuesday in the Denver Museum of Nature & Science.(David Zalubowski/Associated Press)
U.S. President Barack Obama on Tuesday signed into law a $787-billion US stimulus package his administration hopes will help lift the country’s economy out of recession.
“I don’t want to pretend that today marks the end of our economic troubles,” Obama said before signing the legislation. “Nor does it constitute all of what we’re going to have to do to turn our economy around. But today does mark the beginning of the end.”
Obama signed the bill, which is the foundation of his administration’s economic recovery plan, at the Denver Museum of Nature & Science to promote the stimulus package’s push for “green” jobs in the energy field.
The package also includes funds for infrastructure and school investments, along with tax cuts.
“We have begun the essential work of keeping the American dream alive,” Obama said.
The White House has established a website, www.recovery.gov, that will allow people to track where the money is being spent.
Battered by the subprime mortgage and credit crunch, the U.S. economy has been in recession since late 2007, shedding 3.6 million jobs in that time. In January alone, U.S. employers cut 598,000 positions ? the biggest one-month drop since 1974.
“None of this will easy. The road to recovery will not be straight,” he said, but adding he is confident that the struggling economy will be left behind.
Even as the first stimulus bill was being made law, the Obama administration said it has not ruled out a second boost for the economy. White House spokesman Robert Gibbs said the government would do what it takes to spur the economy, although he said there are no immediate plans for a second stimulus package.
Obama said the stimulus package won’t constitute all of what will need to be done to turn the economy around. He is expected on Wednesday to unveil a $50-billion US plan to help homeowners stave off foreclosure.
Another candidate for commerce secretary turns Obama down February 16, 2009
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Another potential U.S. commerce secretary has withdrawn his nomination.
Republican Senator Judd Gregg of New Hampshire said “irresolvable conflicts” with President Barack Obama’s handling of the economic stimulus have taken him out of the running for the position.
“We are functioning from a different set of views on many critical items of policy,” Gregg said in a statement released by his Senate office.
Gregg, however, thanked Obama for the nomination, and said, “I especially admire his willingness to reach across the aisle.”
He said his withdrawal had nothing to do with the vetting of his past that Cabinet officials routinely undergo.
Gregg was Obama’s second choice to fill the commerce portfolio after New Mexico Governor Bill Richardson withdrew several weeks ago in the wake of a grand jury investigation into alleged wrongdoing involving state contracts. He has not been implicated personally.
It?s the latest setback for Obama in his attempt to build a Cabinet.
Treasury Secretary Tim Geithner was confirmed despite revelations that he had not paid some of his taxes on time, and former Senate Majority Leader Tom Daschle withdrew as nominee as health and human services secretary in another income-tax controversy.
Conservatives in both houses have been relentless critics of Obama?s stimulus plan, arguing it is filled with wasteful spending and won’t create enough jobs. Gregg has refrained from voting on the bill ? and on all other matters ? while his nomination was pending.
Obama wants salary cap for many U.S. executives February 5, 2009
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The White House plans to set a maximum wage for many U.S. executives.
U.S. President Barack Obama says the lavish bonuses some Wall Street executives get are shameful.
“This is America. We don?t disparage wealth,” said Obama. “But what gets people upset and rightfully so is executives being awarded for failure. Especially when those rewards are subsidized by U.S. taxpayers, many of whom are having a tough time themselves.”
The move comes amid public outcry over $18.4 billion US in bonuses paid out in 2008 at a time when taxpayer money was shoring up the financial system.
“For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn?t just bad taste; it?s bad strategy, and I will not tolerate it as president,” he said.
‘There is a deep sense across this country that those who are not responsible for this crisis are bearing a greater burden than those who were.’?U.S. Treasury Secretary Timothy Geithner
Under Obama?s plan, top executives at firms receiving extraordinary help from U.S. taxpayers will have their compensation capped at $500,000 US. If they receive any additional compensation in the form of stock, it can?t be cashed in until taxpayers are paid back.
“Companies receiving federal aid are going to have to disclose publicly all the perks and luxuries bestowed upon senior executives and provide an explanation to the taxpayers and to shareholders as to why these expenses are justified,” said Obama.
“We?re putting a stop to these kinds of massive severance packages we?ve all read about with disgust. We?re taking the air out of golden parachutes.”
There will also be more transparency for costs such as aviation services, big parties, office renovations and conferences.
The chill may already be settling in.
On Tuesday, Wells Fargo abruptly scrapped an upcoming sales retreat to Las Vegas.
The company received $25 billion in taxpayer bailout money and recently announced a $2.3-billion loss for the last quarter of 2008.
It had booked 12 nights at two of the most expensive hotels in Las Vegas, but after lawmakers and investigators admonished the company, Wells Fargo cancelled the event.
Companies that have previously received bailout money ? such as financial giant Citigroup and insurer AIG ? would have to agree to stricter oversight and prove they have followed already established limits on executive compensation, which are widely seen as being too lax.
Proposals for companies that DON?T receive U.S. government assistance
Top executives at financial institutions must hold stock for several years before cashing out.Shareholders should have more say on executive compensation.A Treasury Department conference on an overhaul of executive compensation.
“There is a deep sense across this country that those who are not responsible for this crisis are bearing a greater burden than those who were,” said U.S. Treasury Secretary Timothy Geithner. “The executive compensation polices we?re announcing today are designed to strengthen the public trust and get credit flowing again.”
Critics said the move could prompt talented executives to flee companies that fall under the guidelines.
“One size fits all has never worked. It is an understandable effort but it is a dangerous one,” said Mark Poerio, partner at law firm Paul Hastings.
“If you have someone who was making well over $1 million, and now they are capped at $500,000, it is very conceivable that they are going to look to go to a company that is not subject to those limitations.”
Obama and senior congressional Democrats are also seeking to push through an economic stimulus package of almost $900 billion US despite Republican criticism that it focuses too much on government spending and not enough on tax cuts.
The cap on executive pay would not apply to banks in good financial shape that receive federal assistance.
Quebec wants to be Obama’s go-to source for green energy February 4, 2009
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Quebec Energy Minister Claude Béchard is ordering Hydro-Québec to speed up construction of hydro dams now that the United States is expressing more interest in renewable energy under President Barack Obama.
The province is giving the utility an extra six months to update its strategic plan in order to address the increased demand for renewable energy expected to come from the U.S. under the new administration.
‘They are more open to green energy, and we want to be one of their best clients.’? Quebec Energy Minister Claude Béchard
Quebec needs to be front and centre when the U.S. goes shopping for alternatives to oil and gas, Béchard said.
“They are more open to green energy, and we want to be one of their best clients,” said Béchard.
“If, in the past, Alberta was a leader for energy in North America for the United States, in the future, with this new administration, we want to be number 1 with green energy.”
Hydro-Québec had been scheduled to release its four-year strategic plan this month.
However, the original plan did not take into account changes in Washington’s energy policy. It will now be released in August.
Béchard hopes the revised strategic plan will outline steps for speeding up construction of new hydro-electric installations, including the Eastmain 1-A project on Rupert River and the 1,550 megawatt Romaine River complex.
Quebec faces several obstacles in expanding its hydro production, including possible resistance by aboriginal communities in areas that would be affected by new power dams.
Quebec has also been in talks with Newfoundland and Labrador over development on rivers that cross the interprovincial boundary. Those talks are currently stalled.
Obama administration reviewing ‘Buy American’ clause February 2, 2009
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U.S. President Barack Obama’s administration is hinting that it may push Congress to reconsider its controversial Buy American clause in its $819-billion financial stimulus package.
“The administration will review that particular provision and will make a determination of it,” White House Press Secretary Robert Gibbs told reporters in Washington on Friday.
The provision, which has quickly become known as the Buy American rule, would require all public works projects funded by the stimulus package to use only U.S.-made iron and steel. It is part of an economic stimulus package currently before the U.S. Congress and approved by the House of Representatives on Wednesday.
The Senate, which will begin debating the legislation on Monday, could add that all stimulus-funded projects use only U.S.-made equipment and manufactured goods.
The measure is meant to help stimulate the U.S. economy and create jobs but it’s raising concerns about protectionism.
Gibbs said the administration is looking into whether the measure would violate U.S. trade obligations.
“The administration ? understands all of the concerns that have been heard not only in this room but in newspapers produced both up north and down south,” he said.
Trade on the agenda
Gibbs said he expects the provision to be discussed in bilateral meetings between Canada and the United States.
Obama will be making his first international trip to Canada on Feb. 19. He has said he wants to have the stimulus package signed into law by mid-February.
“I don’t think there is any doubt that trade will be on the agenda,” Gibbs said.
Canadian steel plants produced almost 16 million tonnes of steel in 2007, employing about 32,000 people, along with an estimated 140,000 indirect jobs.
American trading partners have joined with Canada to denounce the measure that would exclude Canadian steel and foreign manufactured goods from the spending plan.
European steelmakers have also objected to the provision, saying it violates U.S. commitments under the World Trade Organization’s procurement pact.
European Union officials have confirmed they are also examining the issue to decide if grounds exist to file a WTO complaint.
‘Every shovel, every crane’
U.S. businesses have also gotten involved and expressed concerns about retaliation from overseas if the protectionist measure is allowed to pass.
The U.S. Chamber of Commerce is among the business groups pushing to have the provision removed or modified.
“When you include all manufactured goods in these projects, you’re talking about every shovel, every crane,” Chris Braddock, a policy director with the chamber, told Reuters. “It’s not just the steel going into bridges. Now it’s the truck that is involved in building the bridge or the road.”
The provision could end up costing American jobs and trigger international retaliation, said Thomas Donohue, chamber president.
“Such provisions would ? cede our leadership role as a longstanding proponent of free and fair trade,” Donohue said.
The Buy American clause is bad politics and bad economics, said Ontario Premier Dalton McGuinty.
“This is a global recession. The only way that we’re going to emerge from this is by acting in concert and finding ways to support one another,” McGuinty said.
Canadian officials lobbying
But Vice-President Joe Biden told CNBC on Thursday he believed it was legitimate to have some portions of Buy American in the stimulus plan.
“I don’t think there is anything anti-competitive or anti-trade in saying, ‘We are stimulating the U.S. economy.’ The purpose is to create U.S. jobs,” Biden said.
At the World Economic Forum in Davos, Switzerland, Canada’s Finance Minister Jim Flaherty warned against protectionism in an interview with BNN.
“One of the strong messages ? is that the last thing the world needs now is protectionism,” Flaherty said. “That was the mistake that was made in the 1930s. We don’t want to go there.”
Canada’s ambassador to the United States, Michael Wilson, is also personally lobbying the White House and presenting arguments that the plan violates the North American Free Trade Agreement.
Canadian officials are hoping that by the time the legislation reaches Obama’s desk, it will have enough waivers inserted into it that there will be a loophole for Canadian businesses.
With files from the Associated Press (more…)
