Entries in Treasury (5)


$200K Per Job? Tim Geithner Says White House Jobs Plan Still a Bargain

ABC News(WASHINGTON) -- Treasury Secretary Timothy Geithner didn't dispute a Harvard economist's estimate that each job in the White House's jobs plan would cost $200,000, but said the pricetag is the wrong way to measure the bill's worth.

And he also pointed out in an interview Monday with ABC News that there is no other option on the table for getting the economy moving and putting more people back to work.

"You've got to think about the costs of the alternatives," Geithner said when asked about Harvard economist Martin Feldstein's calculation that each job created by President Obama's American Jobs Act would cost taxpayers about $200,000.

"If government does nothing, it does nothing now because they're scared by politics or they want to debate what's perfect, then there will be fewer Americans back to work, the economy will be weaker," he said.

"We can borrow money for 10 years as the government of the United States because people have confidence in this country at less than two percent," he said. "The responsible path now is to take advantage of the unique position we're in as a country. People have a lot of confidence in us. Let's take advantage of that now to do things that help growth in the short-term."

Geithner told ABC News he believes there is a "very good chance" the Jobs Act will pass because the proposals have seen bipartisan support in the past and the cost of inaction is far too high.

At the same time Geithner is trying to help spur the U.S. economy, he is pushing European leaders to act quickly in the face of a looming crisis.

After a generation of high government spending, Greece is on the brink of bankruptcy and, if it collapses, it could take down other European economies and leave American banks with $41 billion in losses.

In the last week, the average American's 401(k) has lost $7,000 because of Europe's instability.

"It hurts people very directly and very quickly when stock prices fall and the value of their pensions fall," Geithner said. "[Greece] borrowed a lot and they spent too much....[I]t's going to take them years and years to dig their way out of that....I think they have time. But not very much time."

Even in the face of a stagnant economy at home, Geithner said there are signs that things are turning around.

"If you talk to companies around the country like I do, you'll see that something -- something very promising is starting to happen right now," he said. "Companies are starting to re-look at where they produce, American companies, companies that moved things to Mexico and China decades and years ago are starting to rethink it.

"With all our challenges as a country, most companies that have the opportunity to produce or to compete around the world, they'll still say it's better to be in a company headquartered in America and we still have the strongest fundamentals," he said.

Copyright 2011 ABC News Radio


Tim Geithner: 'Spectacle' in DC Damaged Economy

Darren McCollester/Getty Images(WASHINGTON) -- Congress may have avoided default when the House voted to raise the debt ceiling Monday night, but Treasury Secretary Tim Geithner said the chaotic negotiating process hurt the economy and the U.S. may still be downgraded.

“I think confidence here was absolutely very damaged by this spectacle they’ve seen in Washington of a significant number of elected officials in this country threatening default,” the Treasury Secretary told ABC News.

The deal won’t hurt the recovery or lead to a double dip recession, the secretary said. He also says he’s pleased that it implements modest cuts now with more significant cuts later.

“You know, I think the basic reality we live with and, you know, part of governing is recognize we live with -- we don't have unlimited resources, and we inherited and are left with unsustainable deficits long term,” he said.

The deal, the secretary said, won’t cost jobs -- but it won’t create any either.

“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.”

The Democrats are now expected to pivot hard towards extending the payroll tax -- something Obama couldn’t get in this deal but Geithner says they can still push through.

“I'm very confident that's going to happen.  You know, again, I've been part of all these discussions,” he said.

“I think it's going to be very hard for Republicans to prevent that from happening. I think it's very hard for them to stand up and say that they're going to try to block the extension of that tax cut that's worth about $1,000 a year for the average American family. Untenable for them to block that,” he said.

Copyright 2011 ABC News Radio


Donors Fighting Debt Crisis with 'Tiny' $2 Million Contribution

VisionsofAmerica/Joe Sohm (WASHINGTON) -- While lawmakers fight over how many trillions of dollars should be cut from the deficit, some Americans are taking debt reduction into their own hands, albeit with far fewer zeros.

So far this year, individuals have donated almost $2 million to a little-known Treasury fund to chip away miniscule pieces of the country’s crushing $14.3 trillion debt. That $2 million is about .0017 percent of the $2.1 billion the United States pays every day just on the interest of that debt.

“It’s a very, very, very, very tiny, tiny amount,” compared to entire amount of the debt, said Mckayla Braden, a spokeswoman for Bureau of Public Debt. “We’re borrowing billions every week. It’s just a tiny bit, a rounding error probably.  But it means a lot to the people who are giving.”

Braden said that while donations most often come in the form of a personal check in a standard envelope, the bureau has received everything from a gold coin to nickels and dimes given by civics class students.

“More so it is just individuals who for some reason really feel they want to give more to their country,” Braden said.

But at an office that recently had to buy new calculators because the debt now has too many zeros for the old ones, even a gold coin seems like pennies.

“When [the debt] went to the trillions, we had to get new calculators because we didn’t have ones that go over 10 trillion,” Braden said.

The debt-reduction fund was established by Congress in 1961 in order to accept a $20-million donation that Susan Vaughan Clayton, a wealthy Texan, left to the federal government in her will. The fund is now managed by the Bureau of Public Debt, a branch of the Treasury Department.

Ultimately, all the donations end up in the Treasury’s general fund out of which almost all government expenditures are paid.

Braden said in the 32 years she has worked for the bureau, she would guess there have been fewer than 100 donations of more than $200,000. She said most people send in checks or cash for about $20 or $30.  The bureau sends a pre-written thank you letter to each donor who supplies a return address.

Some  lawmakers, such as Rep. Timothy Walz, D-Minn., are already pitching in to help lower deficits. When Walz took office in 2007, he decided not to accept a higher salary than his predecessor had, which meant the first-term congressman gave back about $6,600 to the government between January and September 2010 alone.

"It's a token measure, but it's something I can do," Walz told ABC’s Maya Srikrishnan in December.
Copyright 2011 ABC News Radio


Treasury Dept.: $30 Billion in Libyan Assets Frozen

Photo Courtesy - Getty Images(WASHINGTON) -- The U.S. government has blocked $30 billion in Libyan assets since President Obama imposed sanctions on Friday, the largest amount ever frozen, the Treasury announced Monday afternoon.

The $30 billion is a total of all of the assets that have been blocked, including assets of the government of Libya, the Central Bank of Libya and the Libyan Investment Authority. David Cohen, acting undersecretary for terrorism and financial intelligence, was unable to provide details as to how much belonged to the Gaddafi family versus the government and could not say which U.S. financial institutions were involved.

Asked about evidence of withdrawals in the days prior to the sanctions, Cohen explained, “I don’t want to suggest that it certainly has not occurred, but we have not seen evidence that there was an effort to liquidate these accounts in the days preceding the execution of the executive order.”

Obama issued an executive order on Friday freezing the assets of Col. Moammar Gadhafi and his children, as well as the government of Libya and its agencies. On Saturday, the United Nations Security Council adopted Resolution 1970, which froze the assets of Gadhafi and his five children. The U.K. then adopted complementary sanctions on Sunday, and on Monday the European Union announced they are in the process of adopting their own sanctions.

Copyright 2011 ABC News Radio


Obama Administration: China Not a Currency Manipulator

Photo Courtesy - ChinaFotoPress/Getty Images(WASHINGTON) -- In a much-anticipated semi-annual report to Congress, the Obama administration on Friday again declined to cite China as a currency manipulator despite continued pressure from Capitol Hill.

In the report, the Treasury Department stated that “based on the resumption of exchange rate flexibility last June and the acceleration of the pace of real bilateral appreciation over the past few months, and in view of the commitment during President Hu’s visit that China will intensify its efforts to expand domestic demand and further enhance exchange rate flexibility,” the agency had decided not to brand China as a currency manipulator.

The Treasury said that China’s progress towards a more flexible exchange rate has been “insufficient” and that “more rapid progress is needed.”

Members of Congress on both sides of the aisle have vociferously urged Treasury to denounce China as a currency manipulator in recent years.

A group of Senate Democrats led by Chuck Schumer, D-N.Y., last month renewed a push to get the administration to target China. The senators argued that China costs U.S. jobs by undervaluing the yuan, a move that helps China sell its exports for less. The senators said the yuan is undervalued by 25 to 40 percent.

The lawmakers’ bill would ratchet up pressure on the Treasury to cite China and other countries for employing artificial exchange rate policies and it could impose higher tariffs on imports from these countries. Despite efforts on Capitol Hill to get Treasury to pinpoint China as a currency manipulator, the administration has opted for tough talk instead, as evidenced by this latest report.

Last month Treasury Secretary Tim Geithner said China’s currency was “substantially undervalued” and noted that “this is not a tenable policy for China or for the world economy.”

Copyright 2011 ABC News Radio

ABC News Radio