U.S. Treasury Secretary Timothy F. Geithner said today that the nation’s economy is “regaining strength” and that the recovery “will depend in part on events beyond our shores.”
“While the economy is regaining strength, we still face significant economic challenges,” Geithner said today in the prepared text of remarks to a House Appropriations subcommittee. “Unemployment is still far too high, the housing market remains weak, and the overall effects of the financial crisis remain an obstacle to growth.”
Geithner said the U.S. recovery depends in part on events in Europe. He also urged lawmakers to support the Obama administration’s budget request for Treasury and initiatives on housing, student loans and taxes.
“There’s lots that separate us,” Geithner said to lawmakers, including “how fast we cut deficits, where we cut spending, where we make sure we’re investing in more things that matter for future growth, how we protect the safety net, how to make Medicare, Medicaid more sustainable, how do we define tax reform in a way that’s fair.” He called those differences “fundamental,” yet not “unbridgeable.”
Geithner also said Treasury would soon present a plan to reform Fannie Mae and Freddie Mac. The government-sponsored enterprises have been under conservatorship since 2008. Treasury has already provided three options for reform.
“We are hoping to be in a position relatively soon to engage with Congress more substantively to narrow those range of choices,” Geithner said.
Geithner highlighted the administration’s programs to modify mortgages and assist distressed homeowners. He urged Congress to go further.
“As the president has made clear, more can be done to help, and we urge Congress to consider the president’s plan to help homeowners refinance their mortgages to take advantage of lower rates,” Geithner said.
President Barack Obama has proposed a plan to help “responsible” borrowers secure low-interest loans insured by the Federal Housing Administration even if they owe more than their house is worth.
Geithner also said the U.S. won’t hit its debt limit again until late in the year and warned against Congress repeating the threat of default.
“We cannot put the country through what we put the country through last July and August with the threat of default for the first time in our nation’s history hanging over the United States for a long period of time,” Geithner said. “That did more damage to consumer confidence, business confidence, than almost what was caused by the crisis.”
Geithner said he remains concerned about China allowing its currency to appreciate. He said they have “some ways to go” and he’d like to see them go further.