22 January 2009
Quick, Careful Action Needed on Economy, Treasury Nominee Says
Treasury Secretary-designate Geithner appears before Senate committee
Washington — The United States must act with the “strength, speed and care necessary to get our economy back on track and to restore America’s faith in our economic future,” Secretary of the Treasury–designate Timothy Geithner says.
Geithner outlined for the Senate Finance Committee January 21 the Obama administration’s vision for improving the U.S. economy. The committee voted January 22 to recommend Geithner for confirmation, and the Senate is expected to act on his nomination the week of January 26.
The secretary-designate said the United States faces many challenges, including a loss of confidence in its financial system, unprecedented home foreclosure rates and growing concerns about unemployment.
“We have experienced a great loss of faith in our economy,” Geithner said. “But we have not lost the most fundamental of American abilities — the ability to change, to adapt and to reform.”
STRENGTHENING THE AMERICAN ECONOMIC SYSTEM
The U.S. government’s goal is a more stable and more competitive free-market economic system that will encourage people to invest, innovate, create jobs and build stronger communities and better lives, Geithner said.
The country’s economic recovery will depend on infrastructure reforms to expand access to — and reduce the costs of — health care, to move toward energy independence and to improve Americans’ job skills, Geithner said.
If passed by Congress, Obama’s American Recovery and Reinvestment Plan will meet some of these goals, the secretary-designate said. The plan calls for major investments in the nation’s infrastructure. The American Recovery and Reinvestment Plan “will immediately jump-start job creation and long-term growth,” the president said in a January 8 speech. (See “Obama Seeks ‘Collaborative, Consultative Process with Congress.’”)
Americans also need confidence in the strength and integrity of the U.S. financial system, Geithner said. “Well-designed financial regulations with strong enforcement are absolutely critical to protecting the integrity of our economy,” Geithner said.
Geithner said the Emergency Economic Stabilization Act passed by Congress in the fall of 2008 was a first step toward improving the flow of credit and strengthening the system. However, the Obama administration believes more improvements are needed, he said.
“I know there are serious concerns about transparency and accountability, confusion about the goals of the program and a deep skepticism about whether we are using the taxpayers’ money wisely,” Geithner said. He said many Americans believe the program, commonly referred to as a bailout program, is providing too much benefit to large financial institutions and not enough benefit for small businesses and families.
“We have to fundamentally reform this program to ensure that there is enough credit available to support recovery,” Geithner said. “We will do this with tough conditions to protect the taxpayer and the necessary transparency to allow the American people to see how and where their money is being spent.”
Noting that there is a severe recession both domestically and abroad, Geithner said the United States “can have a great and positive impact on the global economic and financial system, but only if the quality of our ideas and actions win the support of other nations.”
Geithner also said he believes America’s national security is tied to its economic strength. He called for more investment that would help Americans confront the “challenges of trade and technological change.”
In the days leading up to his hearing, Geithner faced criticism over late payment of taxes owed from 2001 to 2004. Acknowledging this error to the Senate panel, he said, “They were avoidable mistakes, but they were unintentional. I should have been more careful.”
The full text of Geithner’s prepared remarks (PDF, 5 pages) is available on the Web site of the Senate Finance Committee.
