HELENA – U.S. Sen. Max Baucus says he believes the economy’s slide is near the bottom, but more can be done by Congress to correct flagging confidence in financial markets.
Baucus told the Helena Chamber of Commerce Tuesday that he believes the Federal Reserve has done a “pretty good job” of providing liquidity. That, coupled with the economic stimulus package, should start improving the economy in the coming months.
Baucus is chairman of the U.S. Senate Finance Committee and said he has been talking to experts in the past few days about the state of the economy.
Baucus said he’s not yet sure Wall Street is being honest about the financial integrity of its large investment banks. But he says the financial markets will be fixed as confidence returns.
“My guess is that this thing is starting to bottom out a bit,” Baucus said.
Baucus said policy makers need to make sure that incentives provided to help Wall Street and individual homeowners stuck in bad loans don’t reward speculators who took bad risks. At the same time, Congress needs to help those found in trouble.
Baucus said rising gas prices are also a problem. He said he would like Congress to tackle the problem by spurring construction of another U.S. refinery, which hasn’t been done in years.
Baucus said he has been battling the White House over changes to the tax system. Baucus and Democrats want to pay for tax cuts by closing “loopholes” that raise enough money to pay for the cuts.
He said President Bush is refusing to go along with that because he believes the changes in tax code that raise money are indeed tax increases.
“It’s not raising taxes, it’s not raising the tax rate in the traditional sense,” Baucus said.
He said similar battles are playing out over the farm bill and other legislation.
Baucus said the job as chairman of the Finance Committee is more demanding than he envisioned. But he said Montana stands to profit now that a Montanan is for the first time chairing the panel.
“There’s a lot more work than I ever anticipated,” he said.
Baucus, up for election this year, is being challenged by several Republicans.