November 1st, 2009
11:03 AM ET
5 years ago

Geithner: Deficit must come down, but growth still the priority

Washington (CNN) - Economic growth and job creation remain the government's top priorities, despite a federal deficit that is "too high," Treasury Secretary Timothy Geithner said in an interview broadcast Sunday.

Geithner called the latest report of economic growth in the third quarter "good news," but in the interview taped Saturday with the NBC program "Meet the Press," he stopped short of declaring the recession over.

The Obama administration's two "central imperatives" were restoring sustainable economic growth and creating jobs, Geithner said. Lowering the deficit could then occur as the economy recovers fully, he said.

The deficit will "have to come down; it's too high," Geithner said.

Asked how to lower the deficit, Geithner acknowledged that the government faces "hard choices" but wasn't ready to decide on raising taxes. He reaffirmed President Barack Obama's campaign pledge against increasing the tax burden on those making less than $250,000 a year.

"We're going to have to bring our resources and our expenditures more in balance," he said, adding that economic growth is a pre-condition for job creation and eventual budget balancing. "Right now we're focused on getting growth back on track."

Geithner cited the need to open more credit for small businesses, warning that financial institutions accused previously of taking on too much risk now may be too cautious.

"The big risk we face now is that banks are going to overcorrect and not take enough risk," he said.

Asked about unemployment, Geithner said the situation would continue to worsen before it gets better. He said economic growth was the necessary pre-condition for job creation that would reverse the continuing increase in jobless numbers.

Geithner also said it was too soon to know if a second economic stimulus package was needed, but he supported plans before Congress to extend unemployment benefits and the homebuyers' tax credit that originated under the previous stimulus package.

The economic discussion allowed Geithner to advocate health care reform legislation before Congress, saying deficit reduction was dependent on bringing down health care costs.

"The best way to add to a long-term deficit and add to the burden is not reforming health care today," Geithner said.


Filed under: Economy • Timothy Geithner
soundoff (24 Responses)
  1. terry,va

    How does Geithner and Obummie expect the deficit to come down with all the socialised programs they are wanting. These guys fell out of their tree and hit their head.

    November 1, 2009 12:50 pm at 12:50 pm |
  2. independent Jim

    Get ready for astronomical inflation.

    November 1, 2009 01:08 pm at 1:08 pm |
  3. tate

    They have saved or created 2 trillion in debt. They have lost 7 million jobs. Closer and closer to canada. Maybe China can protect us

    November 1, 2009 01:26 pm at 1:26 pm |
  4. Drone Pilot

    Geithner's nose is growing. He was part of the corruption that got us into this mess. We need to audit the Federal reserve and see where the money went. America will never be great again unless we put these financial criminals in jail. The rest of the world won't trust us unless we purge out the criminals first.

    November 1, 2009 01:26 pm at 1:26 pm |
  5. C. Farrell, Houston, Tx

    The deficit will go down and if any idiot can't see that it's been in the making with the President's visits to other countries who have loaned us money. All deals aren't made on the golf course.

    November 1, 2009 01:26 pm at 1:26 pm |
  6. Jeremy, PA

    @terry

    Well for one, the programs will be self sustaining (for the most part) and they are going to end unnecessary tax cuts for the wealthy, so the percentage of income paid in tax is flatter across the board. Just a couple examples but there are plenty more.

    November 1, 2009 01:27 pm at 1:27 pm |
  7. Pat F

    Geitner is the biggest clown in the circus. He's Alfred E. Neuman "What, me worry about deficits?

    This guy will live in memory as facilitating the destruction of American prosperity. But that is the left's goal, isn't it?

    November 1, 2009 01:29 pm at 1:29 pm |
  8. Borkenstein

    Borrowing money to pay off debts associated with unethical and immoral behaviors followed by outright theft. Am I talking about drug addiction? No – the CRACKHEAD ECONOMICS of the Obama Administration!

    November 1, 2009 01:48 pm at 1:48 pm |
  9. pat

    I am sure Mr Geithner knows better. The deficit has to start coming down substantially in the near future as the dollar has already sunk 25-30 cents in the last year as it relates to the euro. I would cut federal spending at least $300 billion, large amounts out of the military, and spend little more TARP money.

    Unless the president starts to walk away from these liberals, he will suffer the consequences of Pres Carter; he will be a one term president. The Teas Party People will have an effect on future elections, and they are not really Republican or Democrat. These huge deficits have awakened them.

    November 1, 2009 02:02 pm at 2:02 pm |
  10. S Callahan

    Deception seems to be the fashionable word of Washington, imported from Hollywood maybe.

    November 1, 2009 02:03 pm at 2:03 pm |
  11. Jesse

    I am so sick of hearing guys like Pat tell us how the "left is trying to bring down America" and how that's what they really want.

    I'm equally sick of the leftists saying that the "righties" are trying to create a fascist state run by powerful corporations and the rich.

    As a country we will NEVER be great again until we can have open and honest debate and disagreement without charging the other side with treasons. Left and right? You aren't opponents, you're playing for the same team. We NEED America to pull out of these humdrums that have been created by poor governance from BOTH sides. We need the bankers and Wall St big wigs regulated in the best interested on THE PEOPLE. We need to lower taxes on small business so they can get on with their job creating ways.

    None of this will happen when each side blasts eachother. Come on, let's get back to healthy debate and stop with all the name calling and obstructionist moves (on both sides). You all remind me of my 6 year old nephew who doesn't know any way to get his way other than to huff and puff and blow your house down.

    Wise up. Grow up.

    November 1, 2009 02:17 pm at 2:17 pm |
  12. tpbco

    Ah...Jeremy, Please put down the koolaid. Not ONE of those programs will ever be "self sustaining", just as none are now. It is also very big of you to tell the wealthy that THEY can afford more taxes. The democrats never explain WHAT they are going to do – when they run out of "other people's money". And how much flatter can taxes get to 47% who PAY NONE?

    I have no problem paying my fair share. But enough...is enough.

    Speaking of well run gov't programs, got your H1N1 shot yet?

    November 1, 2009 02:19 pm at 2:19 pm |
  13. vbabe

    the country has been in debt since before world war 1 and it's not getting any better! With Obama's out of control spending it will only get worse

    November 1, 2009 02:30 pm at 2:30 pm |
  14. susie

    This is from the guy who can't figure out how to do his income tax forms.

    November 1, 2009 02:32 pm at 2:32 pm |
  15. Obama is a Socialist

    Never under these people will that happen or

    TAXTAXTAXTAXTAX

    November 1, 2009 02:33 pm at 2:33 pm |
  16. Terry from West Texas

    The national debt (the accumulated total of all our deficits) is about $10 trillion. Before Ronald Reagan came to office, it was about $1.5 trillion. Reagan added $2.5 trillion and George Bush (the good one) added about $1.5 trillion. Clinton added to the debt, but then paid down about half of the debt he had run up. Then the Supreme Court appointed George Bush (the other one) President. He added about $5 trillion – about half of it in his first term and then Conservatives elected him to a second term so he could add the other half.

    So, from Washington to Carter (plus Clinton), American Administrations ran up a $2 trillion dollar debt. Reagan, Bush, and Bush added the other $8 trillion.

    November 1, 2009 02:48 pm at 2:48 pm |
  17. They call me "tater salad"

    Geithner is nothing but a waterboy, stooge, for the elitist Wall Street parasites (Goldman Sachs, Morgan Stanley....ect) and I trust him about as far as I can throw him!!!!!

    November 1, 2009 02:56 pm at 2:56 pm |
  18. sifto77

    Not sure why CNN chose to make it sound like the NJ candidates were both overspending. The Headline implies that Christie is spending as much as Corzine–total misrepresentation–Corzine is spending much more–come on, CNN be fair once in a while!

    November 1, 2009 03:03 pm at 3:03 pm |
  19. Mamushka

    Geithner,
    Please pull your head out and realize that the deficit will not come down until you QUIT SPENDING!

    November 1, 2009 03:04 pm at 3:04 pm |
  20. sifto77

    So,Jeremy– who will pay the taxes to bring down the deficit after those rich people you refer to quit their businesses and send their money elsewhere so you can't have a job OR their money?

    November 1, 2009 03:08 pm at 3:08 pm |
  21. Debbie from CA

    I blame Hank Paulson and I blame Chris Cox for the mess we are in.

    These two sold America down the river and I'm not sure we will recover or be fixed. Their actions or lack of actions have caused our social and economic vulnerabilities we have today.

    Today we learn that Sacks (Paulsons old group) told housing investors all was well when it wasn't. Madoff tells how the SEC (Cox old group) just didn't really pay attention.

    So considering the circumstances I don't think Geithner is doing a bad job. He may be in a job that can't be fixed!

    November 1, 2009 03:23 pm at 3:23 pm |
  22. Mike in MN

    I don't believe for a second that Obama or the Democrats will bring down the deficits. They don't have the will to get rid of any government programs or even to cut spending. In fact a recent Wall Street Journal article said that the current 2010 budget spending bill being written by congress increases spending by 12.1% over last years nearly 4 trillion dollar budget which was a record. Obama and the Democrats see increased spending on current programs or brand new government programs as the solution to everything. Higher taxes for everyone are certain to follow. Be ready to say hello to a new recession within the next year.

    November 1, 2009 03:47 pm at 3:47 pm |
  23. Stu

    To fund the desired welfare state Obama envisions, he will have to tax, tax, and tax some more. Its sad we don't wake up to the reality that giving people a free ride here, a free ride there, just encourages laziness, a lack of innovation, a lack of quality, and a growing bloated demographic of deadbeats.

    November 1, 2009 03:54 pm at 3:54 pm |
  24. erika morgan

    Geithner and his ilk are so measured in their speaking because their agenda is to continue the system that supports greed for them and their palls, for the really "deserving and shrinking" few at the top. They have forgotten that these guys are supported by the many being able to purchase something they have to offer. There was a wisdom in the promise of "a chicken in every pot, and a car in every car port" The promise today needs to be " Health care for every body and an electric car in each garage" By their own admission the parts of the recovery that worked put money into the hands of individual car and home buyers and a few who found or kept government jobs.

    If your kid lets his spending get out of control, and you are smart, you change the rules, pay off his debt and help him find an income. This same thing should have happened nationally. Every taxpayer should have been granted 100,000.00 to be used in this order to pay off his credit cards, short term loan, car loans, student loans, medical debt and finally against the principle on his mortgage. This would have bailed out the banks by absorbing the bad debt, would fairly bring down the inflated housing bubble. If the taxpayer was one of the five in this country who lives debt free, he'd get a nice reward.

    One of the new rules would need to be a cap on interest and fees charged for short term loans, all bills paid within 31 days same as cash, and interest beginning on the 32 day for that bill capped at one quarter percent above the federal prime rate. This is intentionally set at so low a margin that the credit card business should completely dry up and bring America back to the cash economy that served us so well during the fifties and sixties after the benefits of the complete recovery from the great depression were realized.

    I said in the beginning that these folks need to have a re-education in ethics, in order to have a license to have access to decisions about others money. The new rule for immediate implementation needs to be a Masters Degree in Ethics. Law education has included this discipline so teachers exist. All fifty "land grant universities" could begin a two year masters program complete with a masters project that is accepted by a faculty panel who asserts that this candidate is sufficiently disciplined and principled to be trusted with others money.

    November 1, 2009 04:39 pm at 4:39 pm |