Bloomberg News

Geithner Urges U.S. Lawmakers to Leave Drama Out of Debt Limit

April 15, 2012

U.S. Treasury Secretary Timothy F. Geithner. Photographer: Andrew Harrer/Bloomberg

U.S. Treasury Secretary Timothy F. Geithner. Photographer: Andrew Harrer/Bloomberg

U.S. Treasury Secretary Timothy F. Geithner warned Congress against repeating last year’s “very damaging” debate over the debt limit and said the economy is stronger than at any time in the past several years.

“It would be good for the country, if this time, they did it with less drama and less politics and less damage to the country than they did last summer,” Geithner said on NBC’s “Meet the Press” program today, referring to lawmakers’ reluctance to raise the debt ceiling until an 11th-hour agreement with the Obama administration in August.

Geithner has said the U.S. won’t hit its debt limit again until late in the year.

“Americans generally should feel much more confident about the basic strength of the economy than they would have felt any time in the last four or five, six years,” Geithner said. Still, “it’s a very tough economy.”

Geithner is defending President Barack Obama’s record as presumptive Republican presidential nominee Mitt Romney has sharpened his criticism since Rick Santorum dropped out of the Republican race April 10. Geithner also spoke in interviews airing today on CBS’s “Face the Nation” and ABC’s “This Week” programs.

“Obviously, we’ve got a lot of challenges ahead and some risks and uncertainty ahead,” Geithner said on ABC. Those risks include the European debt crisis and oil prices, he said.

Drop in Confidence

Last year’s months-long debate over raising the debt limit caused “a precipitous drop in consumer confidence and business confidence,” Geithner told NBC. “Those drops in confidence were like what you saw in a typical recession. It was very damaging, completely unnecessary, and very avoidable.”

Geithner said global economic growth and “concerns about Iran” have contributed to higher gasoline and oil prices in the past six months. Future costs could depend in part on “whether our broad efforts to bring Iran to the table and deter Iran from pursuing its nuclear missions are successful.”

The average cost of a gallon of gasoline in the U.S. was $3.90 on April 12, down from a 10-month high of $3.94 that was reached April 5, according to AAA, the nation’s largest automobile association.

Geithner, asked what the U.S. jobless rate will be on election day, told CBS that “if the economy continues to gradually strengthen like it’s been doing, then the unemployment rate will be lower.”

Unemployment

Unemployment (USURTOT) was 8.2 percent in March, when U.S. employers added 120,000 jobs, less than the most pessimistic estimate in a Bloomberg News survey of economists. The rate had fallen to 8.3 percent in February from 9.1 percent last August.

Jobless claims increased 13,000 in the week ended April 7 to 380,000, the highest level since late January, the Labor Department reported last week. The median forecast in a Bloomberg News survey called for 355,000 claims.

Geithner also told CBS that the administration would continue to advocate the so-called Buffett Rule, a proposed minimum tax on people making at least $1 million annually.

“If we don’t push for things that make sense, then we’re not governing,” he said.

The minimum tax is named for billionaire investor Warren Buffett, who says he pays a lower tax rate than his secretary, largely because of the preferential treatment given to capital gains and dividends. Obama has cited Buffett and his secretary in campaigning for the tax, saying the wealthy shouldn’t pay a lower rate than middle-income individuals. The Buffett Rule is scheduled for a procedural vote in the Senate tomorrow.

Women’s Jobs

Geithner told CBS that Romney’s assertion last week that 92.3 percent of jobs lost during the Obama administration had been held by women was a “ridiculous and very misleading way of looking at the recession.”

The statistic was rated “mostly false” by PolitiFact, a nonpartisan website that checks political claims.

Male-dominated industries such as construction and manufacturing lost more jobs early in the U.S. economic downturn -- when George W. Bush was president -- while women were more heavily represented in the job losses that came in the later months, when state and local governments laid off public-sector workers such as teachers.

Romney is counting job losses from the start of the Obama administration, a time frame that only counts the later part of the recession. Overall, more men than women have lost jobs during the entirety of the nation’s economic struggles, the site reported.

Geithner reiterated that he won’t remain Treasury secretary if Obama wins re-election. One term “seems like the right amount of time for me,” he told CBS.

To contact the reporter on this story: Ian Katz in Washington at ikatz2@bloomberg.net

To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net


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