In appearances on several Sunday talk shows, Geithner
said only 2 to 3 percent of Americans - those making $250,000 or more a year -
will be affected when tax cuts enacted under former President George W. Bush
end on schedule this year.
Republicans want to extend the tax cuts and Democrats are
divided but Geithner said reductions for top earners should end.
"We think that's the responsible thing to do because
we need to make sure we can show the world that (we're) willing as a country
now to start to make some progress bringing down our long-term deficits,"
he said on ABC's "This Week" program.
Geithner played down fears that a slow-paced recovery
might slide into a double-dip recession. He told NBC's "Meet the
Press" he did not expect that to happen, although recovery from the deep
recession that followed the 2008-2009 financial crisis will be prolonged.
"I think the most likely thing is you'll see an
economy that gradually strengthens over the next year or two, you'll see job
growth start to come back, investments expanding ... but we've got a long way
to go still," Geithner said.
The Obama administration has said it wants to keep tax
cuts in place for Americans earning less than $250,000 a year. Some Republicans
say letting any of the tax cuts expire is effectively a tax hike that may hurt
recovery.
Geithner disagreed, saying it was more important to aim
tax cuts at lower-earning Americans and businesses.
"Just letting those tax cuts that only go to 2
percent to 3 percent of Americans, the highest-earning Americans in the
country, expire I do not believe it will have a negative effect on
growth," he said on ABC.
Geithner said the Obama administration wants Congress to
agree on measures to help small businesses, traditionally the main job-creating
engine. He said there were signs "critical" private sector hiring was
strengthening.
"We want to see it happen at a faster pace but I
think most people understand that ... this was a deep crisis," he said.
"It's going to take time to repair that damage, take time to grow out of
this."
He said the overhaul of US financial rules signed into
law last week by President Barack Obama should bolster confidence in the
economy by giving consumers new protections and the government more powers to
restrain bank risk-taking.
Geithner said no reforms can ward off all future crises
but can mitigate the harm. If the reforms that are now law, including powers to
wind down troubled financial firms, had been in place before the crisis, the
damage to jobs and fortunes would have been less, he said.
On NBC, Geithner said there is work ahead to repair the
housing finance system that contributed to the crisis.
"We have to bring to Fannie and Freddie, to the GSEs
(government-sponsored enterprises) and to the broader housing finance market a
better set of policies to make sure we can deliver affordable financing ... without
leaving the economy vulnerable to this kind of crisis," he said.
Geithner said some type of government guarantee to make
sure people have the ability to borrow to finance a house even may be necessary
but said Fannie and Freddie will not be preserved in their current forms.
"We're going to have to bring fundamental change to
that market but I think there's going to be a good case for taking a look at
preserving or putting in place a carefully designed guarantee so homeowners
have the ability borrow ... even in a very difficult recession," he said.
Geithner said it was encouraging China recently ended a
peg between its yuan currency and the dollar, which should help correct a trade
relationship that enables China to rack up huge surpluses while the United
States and others record soaring trade deficits.
"What matters to us and to all of China's trading
partners is that they let that currency appreciate," he said. "What
matters to us is how fast and how far they let it go."
