Geithner Sees `Basic Confidence' in U.S. Economy
U.S. treasury secretary Timothy Geithner said the administration is “likely to take a broader look” at corporate tax policy next year.. Photographer: Andrew Harrer/Bloomberg
Treasury Secretary Timothy F. Geithner said he sees “basic confidence” in the U.S. economy even though credit is “still quite tight” for some borrowers.
For companies that were affected by the recession, “it is still very difficult out there, very hard to get credit,” Geithner told reporters in Washington today. “That’s not surprising given the scale of the crisis.”
Geithner, 48, will lead a council of regulators that will look for risks to the financial system to avoid a repeat of the worst crisis since the Great Depression. Geithner said one of the strengths of the panel, created by the financial regulatory legislation President Barack Obama signed into law yesterday, is that it will have authority to examine non-bank financial firms.
“One of the powers given this group is to make sure that the set of rules on leverage, on capital, apply” to banks such as JPMorgan Chase & Co. as well as firms including Goldman Sachs Group Inc., GE Capital and insurer American International Group Inc., he said.
Geithner said tax cuts enacted under former President George W. Bush for “the most fortunate 2 or 3 percent of Americans” should expire on schedule at the end of this year.
“That will help us begin the process of making a contribution to bringing down our long-term deficits,” he said. “That’s the sensible approach going forward.”
Corporate Taxes
The Treasury secretary also said the administration is “likely to take a broader look” at corporate tax policy next year.
Geithner said Elizabeth Warren, a Harvard law professor who heads the congressional panel overseeing the Treasury’s bailout program, is “one of the most effective advocates for reform” and would be “an enormously effective leader” of a new consumer agency.
Warren is among candidates to head the Consumer Financial Protection Bureau, White House senior adviser David Axelrod said last week. Geithner said he had not yet made any recommendations to Obama, who will nominate a candidate.
Assistant Treasury Secretary Michael Barr and Justice Department counsel Gene Kimmelman, who are on a White House short list for the agency, are “very well-qualified, excellent candidates, too,” Geithner said. “I’ve heard others, too, but I’m not going to share those with you right now, but they’re good.”
Estate Tax
Geithner, responding to a question about the absence of a federal estate tax, said it is “a terribly troubling thing that the United States of America would let that lapse.” The tax should be restored to 2009 levels, he said.
The Economic Growth and Tax Relief Reconciliation Act of 2001 allowed the federal estate tax to expire on Jan. 1, 2010, before resuming again on Jan. 1, 2011.
The death of New York Yankees owner George Steinbrenner on July 13 has focused attention on the absence of the estate tax. Had Steinbrenner died last year, much of his estate would have been taxed at 45 percent, costing his heirs hundreds of millions of dollars.
Geithner declined to say whether he thinks Steinbrenner’s heirs should voluntarily pay the tax.
To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net
Rate These Stories
Rate this Page