Entries in Timothy Geithner (12)


Treasury Secretary: ‘We Can’t Tell Yet’ If Growth Has Stalled

ABC News(WASHINGTON) -- Treasury Secretary Timothy Geithner said on Sunday he believed the economy is “gradually getting stronger,” but said “we can’t tell yet” whether growth has stalled as it has in previous spring months during the Obama administration.

“We can’t tell yet,” Geithner said on ABC's This Week when asked if the same pattern from previous years was repeating, with strong growth in early months of the year, followed by a slow-down, as has happened the last two years.

“But if you look back at what happened in 2010 and 2011, you’re right that you saw some early strength in the beginning of the year,” Geithner said.  “But then what happened was, the crisis in Europe in 2010 and 2011 and then the crisis in Japan and then the oil shock caused growth to slow.  And then in ’11, it was made worse by the -- by all the political drama around the debt limit, which was very damaging to confidence.”

Geithner said the economy is still showing signs of improvement, despite the March jobs report showing just 120,000 new jobs created -- far below predictions, and lower than the 200,000 plus jobs created in the last three months.

“If you look at the evidence, the economy is getting stronger,” Geithner said, citing higher profits, increased productivity and growing private investment.  “We have a ways to go still, a lot of challenges still ahead.  But the broad indicators are pretty encouraging.  They show an economy still growing.”

“We’d like it to be stronger and we’ve got a lot of work to do,” he added.  “But it’s getting better.”

Geithner acknowledged that not all Americans have felt that improvement, with a new ABC News/Washington Post poll last week showing that 76 percent of Americans still believe the country is in a recession.

“Well, it’s obviously still a very tough economy out there,” he said.  “And I think it’s not surprising, given the scale of the damage the crisis caused and how much damage you still see out there.”

Geithner said the continuing unemployment problem has limited individual income growth, but he said he does believe the unemployment rate will be lower on Election Day than it is today.

“If the economy keeps growing at a moderate pace, then, yes, the economy -- more people will be back to work and you should see a gradual reduction in the unemployment rate,” he said.

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Copyright 2012 ABC News Radio


Fed Officials Didn't See 2006 Housing Market Crash Coming

Mark Wilson/Getty Images(WASHINGTON) -- Top officials at the Federal Reserve had no idea in 2006 that the housing bubble was about to burst, according to newly released transcripts of closed-door Fed meetings.

“I think we are unlikely to see growth being derailed by the housing market,” said Chairman Ben Bernanke at the time.

The hundreds of pages unveiled on Thursday also show that Treasury Secretary Timothy Geithner, who was a Fed official, expressed confidence in September 2006 that “collateral damage” from housing could be avoided.


Their views echoed the widely held beliefs of most economists and money managers who, at the time, were confident about growth and stock valuations.  Little did they know, apparently, that the housing bubble was just months away from bursting.

Copyright 2012 ABC News Radio


Geithner on Debt Deal: Don't Know If We Will Avoid Downgrade

Lauren Victoria Burke/ABC NEWS(WASHINGTON) -- Is a credit rating downgrade for the United States more likely because of the way the process surrounding the debt compromise unfolded in Washington?

“I don’t know,” Treasury Secretary Timothy Geithner told ABC News in an interview set to air on Good Morning America Tuesday morning. “It’s hard to tell. I think this is a good result but a terrible process. And again…as the world watched Congress step up to the edge of the abyss it made them really wonder whether this place can work.”

Geithner called the debt deal “a good agreement” and said it benefits the economy in the “long term” because it will force Congress to make tough choices.

But what about the short term? Asked to respond to critics who say it could cost American jobs, Geithner said, “No, it will not.”

Will it create jobs for some of the 25 million Americans looking for work?  

“No, this agreement itself, on its own, doesn’t create jobs,” he said. “What it does is it avoids doing more damage in the short term, because the president refused to accept the types of deep spending cuts that many in Congress wanted, and it -- by locking in some long term savings it raises -- it improves the odds over time.”

Copyright 2011 ABC News Radio


Geithner Expects Agreement on Broad Outline for Deficit Reduction

Official White House Photo by Pete Souza(WASHINGTON) -- Treasury Secretary Timothy Geithner said Tuesday that he expects the president and congressional leaders to reach an agreement on a broad outline for deficit reduction by the end of the week.

“I think the leaders understand we don't have a lot of time,” Geithner said Tuesday to the Women in Finance Investment Symposium at the Treasury Department. “We want to wrap up the broad outlines of an agreement by the end of this week, certainly by the end of next week so we have time to legislate it, put it in place.”

The head of the Treasury stressed that Congress will pass an increase to the debt ceiling before the Aug. 2 deadline because “failure is not an option.”  

“We are a country that pays its bills and I very much appreciate the statements by the leadership, not just Democrats but Republican leadership, that recognize default is not an option,” he said.

Geithner said the agreement needed to have the following components:

-Savings across “all parts of the government,” including entitlements and defense
-Provisions to strengthen the recovery and increase job growth such as investments in education and    
  infrastructure and stronger investment incentives
-Tax reforms to reduce loopholes, subsidies, and tax expenditures within the tax code

Republicans have staunchly rejected any tax increases. House Speaker John Boehner said Monday that tax revenue increases were “never on the table.”    

“The American people will not accept -- and the House cannot pass -- a bill that raises taxes on job creators,” Boehner said on his way into Monday’s debt ceiling negotiations at the White House.

Geithner said President Obama’s tax changes are “modest” and “good economic policy” for long-term growth.

Copyright 2011 ABC News Radio


Is Geithner Contemplating an Exit as Treasury Secretary?

Darren McCollester/Getty Images(WASHINGTON) -- Treasury Secretary Tim Geithner is contemplating leaving his position after the deficit negotiations have been successfully completed, sources tell ABC News, but it’s too early and there are far too many caveats to say that will definitely happen.

Geithner thinks there might be a window for him to leave if the deficit and debt ceiling talks come to a successful conclusion, the economy continues to improve and President Obama approves of his departure, according to sources, who requested anonymity to speak freely.

But those are a lot of “ifs,” and while Geithner is the last man standing from the president’s original top economic advisers, sources say any definitive reporting that he has told the White House he is on his way out the door is premature.

Bloomberg News reported first that Geithner could be eyeing the door.

Copyright 2011 ABC News Radio


Geithner Says Congress Can't Evade 'Responsibility' on Debt Limit

Adam Gault/Thinkstock(NEW YORK) -- In a wide-ranging speech about debt and deficits at the Harvard Club in New York, Treasury Secretary Tim Geithner said Congress should “meet its responsibility” to increase the nation’s debt limit before the Aug. 2 deadline he has set.
“It is simply not an option for Congress to evade the basic responsibility to protect America’s creditworthiness,” said Geithner.
“The debt limit, of course, relates only to commitments we have made in the past. Rather than debating whether we should pay our past bills and whether default would in fact be so bad; rather than designing schemes to allow us to continue to make interest payments by breaking our commitments to seniors and veterans; we should be working together to narrow our differences on how to solve the causes of future deficits.”
The balance of the Treasury Secretary’s speech was spent defining the Obama administration’s position on cutting annual deficit spending and reducing the national debt over the long-term. Of note here, Geithner highlighted the administration’s proposal for a “debt cap” which would lock in deficit reduction targets which, if not met, would lead to automatic spending cuts and tax increases.

Copyright 2011 ABC News Radio


T-14 Days to Debt Limit; Treasury to Start Extraordinary Measures

Lauren Victoria Burke/ABC NEWS(WASHINGTON) -- The Treasury issued another warning to Congress Monday: pass a debt ceiling increase before May 16 or the federal government will be running on fumes.

In a letter from Secretary Timothy Geithner to congressional leaders of both parties, the secretary says that the May 16 deadline mentioned in an April letter is still the date certain for Uncle Sam busting through his congressionally mandated credit limit of $14.3 trillion.

He also reiterated the “catastrophic economic impact that would be felt by every American” should the Congress not act to expand the government’s ability to borrow.

“In my last letter, I described in detail the set of extraordinary measures Treasury is prepared to take in order to extend temporarily our ability to meet the Nation’s obligations if an increase is not enacted by May 16, when we estimate the limit will be reached,” wrote Geithner. “Because it appears that Congress will not act by May 16, it will be necessary for the Treasury to begin implementing these extraordinary measures this week.”

According to the letter, officials in the Treasury Department will stop issuing State and Local Government Series (SLGS) Treasury securities on Friday. Those bonds help states and cities fund infrastructure improvements. While the end user for this debt is not the federal government, the bonds count against the congressionally approved debt limit.

Geithner also provided details on the next set of extraordinary steps the Treasury will undertake to keep the federal government under its credit limit.

Starting on May 16, he says the Treasury will tap into several civil service retirement funds to keep the government functioning. Under existing law, any depletion these funds suffer under the emergency actions will have to be replaced once the debt limit is raised by Congress.

Using these actions will stretch the Treasury’s ability to fund government operations until “… about August 2, 2011, approximately three weeks later than was forecast last month.”

Earlier Monday the Treasury Department issued details of its Quarterly Refunding needs, saying it will need to borrow some $142 billion in the second quarter which ends in June -- that’s lower than the original estimates thanks to higher tax receipts and lower spending. Monday’s report also said that the Treasury will need to issue $405 billion in the third quarter to continue government operations.

Copyright 2011 ABC News Radio


Geithner: Raise Debt Ceiling or Risk Another Financial Crisis

Lauren Victoria Burke/ABC NEWS(WASHINGTON) -- In testimony Tuesday before a Senate Appropriations panel, U.S. Treasury Secretary Timothy Geithner again emphasized to Congress that failure to raise the country’s debt limit would have “catastrophic” consequences and make the recent financial crisis appear “modest in comparison.”

“Default by the United States would precipitate a crisis worse than the one we just went through. I think it would make the crisis we went through look modest in comparison. It would force us of course to cut critical payments to our seniors and it would be a reckless, irresponsible act to this country. I find it inconceivable that the Congress would not act to increase the limit.”

The Treasury boss then said that if lawmakers do not raise the debt ceiling, it could cause a number of “inconceivable” consequences, such as a dramatic rise in unemployment.

“It would be catastrophic. I mean, if you call into question the willingness of the government of the United States to meet its obligations, you will shake the basic foundation of the entire global financial system. It is inconceivable that America would do that. And of course I am totally confident that Congress will act to avoid that,” Geithner said.

“It will raise dramatically the borrowing costs permanently for all Americans. Every business for a very long period time would face a much higher cost of borrowing. Every family would face a much higher cost of borrowing. Unemployment would rise dramatically. Thousands if not hundreds of thousands of businesses would fail. And of course you would shake the confidence of the world in U.S. financial assets and Treasuries. It would be a deeply irresponsible act, again inconceivable.”

Copyright 2011 ABC News Radio


US National Debt Passes $14 Trillion Mark

Photo Courtesy - Getty Images(WASHINGTON) -- The United States government’s debt surpassed the $14 trillion mark on Saturday, inching closer to the $14.3 trillion debt limit.

Treasury Secretary Timothy Geithner earlier this month asked that Congress act quickly to raise the limit.

“Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses and could lead to the loss of millions of American jobs," Geithner wrote in a letter to House Speaker John Boehner. “Even a very short-term or limited default would have catastrophic economic consequences that would last for decades.”

Saying that Congress needs to tread carefully, Boehner issued a response to the Administration's request to raise the limit.

“The American people will not stand for such an increase unless it is accompanied by meaningful action by the President and Congress to cut spending and end the job-killing spending binge in Washington,” Boehner said. “While America cannot default on its debt, we also cannot continue to borrow recklessly, dig ourselves deeper into this hole, and mortgage the future of our children and grandchildren.”

Boehner urged bipartisan cooperation in addressing the budget process.

Copyright 2011 ABC News Radio


Geithner: China's Currency 'Substantially Undervalued'

Photo Courtesy - Darren McCollester/Getty Images(BALTIMORE) -- Treasury Secretary Timothy Geithner called China’s currency “substantially undervalued” and stressed the need for China to revamp its economic system, from the exchange rate to its stance on intellectual property, in a speech at the School of Advanced International Studies at Johns Hopkins University.

“This is not a tenable policy for China or for the world economy,” Geithner said.  “We believe it is in China’s interest to allow the currency to appreciate more rapidly in response to market forces.  And we believe China will do so because the alternative will be too costly --for China and for China’s relations with the rest of the world.”

Speaking at his alma mater, Geithner’s remarks offered a preview of the administration’s position on U.S./China economic relations leading into President Hu Jintao’s visit to Washington next week.

“China of course presents enormous economic opportunities for the United States and for the world but its size, the speed of its ascent, and its policies are a growing source of concern both here and in countries around the world.”

Geithner voiced the administration’s concern with an economy dominated by the Chinese government, theft of intellectual property, and policies that favor Chinese technology over foreign technology.  Geithner urged China to move away from its dependence on export driven growth and emphasize domestic consumption and innovation.

Despite being direct competitors, Geithner called the economic relationship between the U.S. and China “largely complementary” and resolved to encourage improvement in China’s economy.

“The prosperity of Americans depends overwhelmingly on the economic policies we pursue to strengthen American competitiveness.  Even as we work to encourage further reforms in China, we need to understand that our strength as a nation will depend, not on choices made by China’s leaders, but on the choices we make here at home.”

Copyright 2011 ABC News Radio

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