Cummings talks, The Street listens...will Obama?
The collapse of American International Group, and its messy $173 billion government bailout, have boosted the reputation of Rep. Elijah E. Cummings of Maryland, whose stock started soaring after the insurance giant’s tanked.
The West Baltimore congressman began going after AIG last year, and some dismissed him as a gadfly. During a contentious CNBC appearance, a news anchor for the financial channel demanded to know what business Congress had running AIG.
Now, when Cummings talks, Wall Street listens—especially on the Obama administration’s handling of the economic crisis.
One of “the most powerful men on Capitol Hill on the economy” is how ABC’s Diane Sawyer described Cummings the other day.
That inflated assessment of his clout drew an exuberant laugh from Cummings when it came up during an interview at his Washington office.
But, in fact, his role has evolved significantly over the last six months.
He’s now a closely watched barometer of Treasury Secretary Timothy Geithner’s performance. And that has put the liberal Democrat in a potentially uncomfortable spot.
Cummings, an early and enthusiastic Barack Obama supporter, says the president’s success is crucial to turning the economy around. But Cummings insists he won’t be blindly loyal.
“There comes a point where one has to part ways with someone to maintain your own credibility,” he says in discussing Geithner. “While I have some questions about Geithner, I believe he’s competent and I believe that he needs to have an opportunity to do his job.”
Cummings, an early populist critic of AIG, grilled company executives last fall about a week-long retreat at a California spa only days after the first $85 billion bailout.
“They were getting manicures, their facials, their pedicures and their massages, while the American people were footing the bill,” he said, in a sound bite replayed on the network news.
Before long, Cummings was the news media’s go-to guy on AIG, logging hundreds of appearances on television and radio and in the columns of leading newspapers and magazines.
“You’ve been ahead of this thing,” gushed Chris Matthews of MSNBC. “Great work, as always,” chimed in David Shuster, a fellow host on the liberal cable channel.
Cummings may get more airtime this week, when the Oversight committee holds its first AIG hearing of the year. He’s also one of 27 House Democrats who just called for a federal investigation into payments by AIG to other banks. Bloomberg News, whose reporting into AIG has repeatedly been cited by Cummings, described him as the leader of that effort.
Cummings thinks the administration needs time to get the nation’s economic problems under control, but he also says he’s occasionally wondered whether someone other than Geithner, who is closely tied to Wall Street, would have made a better Treasury secretary.
At the request of Geithner’s department, Congress removed a provision from the stimulus bill that could have prevented the latest round of performance bonuses from being paid. And Geithner’s honesty was called into question after he claimed that he wasn’t fully aware of those bonuses until about three weeks ago.
Cummings, who began airing the issue in December, says Geithner should have known.
“He says he didn’t,” says Cummings. “I think anybody who watches the news should have known.”
Cummings isn’t prepared to say that Obama made a mistake in picking Geithner, because he trusts the president to do the right thing.
“The greatest asset that Barack Obama has, as brilliant as he is, is trust,” he says, adding a cautionary note: “I’m telling you, he loses that trust, he’s got problems.”