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Treasury Secretary Geithner defended the federal government's bailout of AIG on Capitol Hill Thursday.

WASHINGTON (CNNMoney.com) – Treasury Secretary Tim Geithner said on Thursday that he had no choice but to pay top dollar to business partners of troubled insurer AIG to avert a deeper financial panic last year.

Geithner defended regulators' actions to prop up American International Group (AIG, Fortune 500) with $62.1 billion that was essentially funneled to 16 banks that were counterparties to AIG insurance contracts.

"I don't understand why this is so complicated," Geithner told the Congressional Oversight Panel at a hearing on Capitol Hill. "You either prevent default, because default would be cataclysmic – or you don't. If you selectively default on any, the thing will come crashing down."

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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."
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The Treasury Secretary said Sunday that he expects to see continued improvement in the economy.

WASHINGTON (CNN) - The U.S. economy is no longer on the edge of collapse, but Americans face "tough choices" in the future on reducing the expanded deficit, Treasury Secretary Timothy Geithner said Sunday.

Appearing on the ABC program "This Week," Geithner said he expected continued economic improvement for the rest of 2009 and a reversal in job losses the following year.

"What you're going to see first is growth turn positive," Geithner said. "Then you're going to see the pace of job losses slow significantly further," with job creation possible next year.

Economic collapse is "not going to happen," Geithner said.

He warned, though, that emergency steps including the bailout plan last year and the economic stimulus bill this year are expanding the federal budget deficit to unsustainable levels.

"We will not get this economy back on track, recovery won't be strong and sustained" if the deficit isn't reduced in the future, Geithner said.

"We can do this - it just requires the will to act," he said, calling an overhaul of the health-care system one important step by reducing costs for both the government and average Americans.

Geithner refused to rule out future tax increases, saying the government would take whatever steps were necessary to reduce the deficit once recovery is established.

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U.S. Treasury Secretary Tim Geithner will push for better relations with China.

(CNN) – Treasury Secretary Tim Geithner is set to meet with several high-ranking members of the Chinese leadership this week, marking the Obama administration's first major overture to the powerhouse nation.

Geithner left Saturday for meetings in Beijing, where he'll discuss ways to strengthen relations between China and the United States, according to the Treasury Department.

China is one of America's most important trading partners, and its economy is tightly intertwined with efforts to reverse the global downturn.

But the relationship is also often a source of tension. Chinese exports to the United States have dominated trade between the two nations since the 1980s. The U.S. trade deficit with China rose again in March to $15.6 billion, the Commerce Department reported.

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Treasury Secretary Geithner is seeking authority to regulate derivatives.

NEW YORK (Fortune) – Treasury Secretary Tim Geithner set plans Wednesday to rein in the wild and wooly derivatives markets.

Geithner proposed requiring that over-the-counter derivatives such as credit default swaps be traded on exchanges, and that all major dealers in derivatives markets be subject to federal oversight.

Geithner said the rules would bolster the stability of financial markets, promote efficient and transparent pricing and help regulators stamp out fraud and abuse.

Appearing at a press conference in Washington, Geithner said he expects to propose the new framework to Congress in coming weeks as the administration and legislators hash out new laws governing derivatives markets.

"The financial crisis was caused by - and exposed – significant gaps in oversight," he said. "We are committed to working with Congress to create more comprehensive system."

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Geithner will host a global finance meeting next week.

NEW YORK (CNNMoney.com) - Treasury Secretary Tim Geithner will host a meeting of international finance ministers next week, the Treasury Department said Monday.

The April 24 gathering of Group of 7 officials in Washington, D.C., will be followed by a larger meeting of Group of 20 ministers.

After a summit in London earlier this month, G-20 member nations agreed to increase oversight of the global financial system and pledged more than $1 trillion to the IMF to help economies in need.

However, certain details of the plan remain unclear and analysts said next week's meetings will likely involve discussion of, among other things, how much money individual members will commit to the IMF.

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Treasury Secretary Timothy Geithner says he never rides first class.

(CNN) - As the government tries to curb corporate excess of companies receiving federal bailout money, Treasury Secretary Timothy Geithner appears to be leading by example.

The man who was grilled by Congress last week over the AIG bonuses took the Delta shuttle from New York to Washington on Saturday, riding in the coach section. Asked why not first class, Geithner said he always rides coach, "never first class".

WASHINGTON (CNN) – President Barack Obama has named one of his economics advisers to the No. 2 post at the Treasury Department and will keep a Bush administration appointee in another top job, the White House announced Monday.

Obama has picked Neal Wolin, an insurance executive who now serves as a White House adviser, as Treasury Secretary Tim Geithner's deputy, the White House said. He also named Lael Brainard, a global economics specialist at the Brookings Institution, as the department's undersecretary for international affairs, and will keep Stuart Levey as the undersecretary for terrorism and financial intelligence.

The moves will beef up staff in the Cabinet agency that is handling much of the Obama administration's economic recovery efforts. Monday's announcements are aimed at filling three of the four top posts in the Treasury Department that require Senate confirmation, the White House said.

"I am grateful for the service of these dedicated and talented
individuals and have the highest confidence that, under the leadership of Secretary Geithner, they will serve the American people well as we tackle the challenges ahead of us," Obama said in a written statement.

Levey was the first person to hold the job of undersecretary in charge of disrupting the financial networks behind terrorism, weapons proliferation and drug trafficking. Former President George Bush appointed him to the post after its creation in 2004, and he will not have to face a new confirmation hearing, the White House said.

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Senate Majority Leader Harry Reid said action is necessary to free up credit.

WASHINGTON (CNN) - Senate Majority Leader Harry Reid said Monday the Treasury Department's plan to rid banks of toxic assets carries "the potential for both risk and reward."

But he said the risk of using public money to buy troubled assets is outweighed by the need to act quickly to get credit flowing again.

"The Treasury Department plan is based on the sound principle that if we are to revive our economy, we must unfreeze the credit markets so people can get the loans they need to keep their small businesses open, buy a car or send their children to college," Reid said in a statement.

"Like any investment, this plan carries the potential for both risk and reward. But above all, we must act – one risk we will not take is standing on the sidelines and doing nothing while a bad situation gets worse."

The Treasury Department unveiled its long-awaited plan to remove many of the troubled assets from banks' books Monday.

WASHINGTON (CNNMoney.com) - The Treasury Department unveiled its long-awaited plan to remove many of the troubled assets from banks' books Monday, representing one of the biggest efforts by the U.S. government yet to tackle the ongoing financial crisis.

Under the new so-called "Public-Private Investment Program", taxpayer funds will be used to seed partnerships with private investors that will buy up so-called toxic assets backed by mortgages and other loans.

The goal is to buy up at least $500 billion of bad assets - such as subprime mortgages that are now in danger of default. Doing so would help cleanse the balance sheets of many of the nation's largest banks, which continue to suffer billions of dollars in losses.

The government will then run auctions between the banks selling the assets and the investors buying them, hoping to effectively create a market for these assets.

Could the toxic asset bailout backfire? CNN Radio's Bob Costantini takes a closer look.

To kickstart things, the administration said it will commit $75 billion to $100 billion and would consider how the program is progressing before committing more money.

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Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill allowing bonuses to be paid.

(CNN) - Treasury Secretary Timothy Geithner told CNN Thursday his department asked Sen. Chris Dodd to include a loophole in the stimulus bill that allowed bailed-out insurance giant American International Group to keep its bonuses.

In an interview with CNN's Ali Velshi, Geithner said the Treasury Department was particularly concerned the government would face lawsuits if bonus contracts were breached.

Watch: Geithner on AIG bonuses

Dodd admitted to CNN Wednesday he'd added the controversial provision after a Treasury official pushed for it. Earlier in the week, Dodd had said he had not played any role in the addition of the loophole.

Geithner told Velshi Thursday he takes full responsibility for the situation.

Also in the interview, airing in part at 5 pm ET on CNN, Geithner said:

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President Obama and Geithner will announce a plan to encourage lending to small businesses.

WASHINGTON (CNN) - President Obama and Treasury Secretary Tim Geithner on Monday will announce administration plans to make lending to small businesses more attractive, two senior administration officials confirm.

Many small businesses, suffering from dried-up coffers and unpaid bills, are having a tough time getting loans from lenders.

"We know that small businesses are the engine of growth in the economy, and we absolutely want to do things to help them," Christina Romer, who heads the Council of Economic Advisers, said on NBC's Meet the Press Sunday.

Romer said the government would pump "a significant amount" of money into boosting small business lending, but she did not reveal a total figure.

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WASHINGTON (CNN) - As auto giants General Motors and Chrysler face Tuesday's deadline to submit plans to show the government how they can repay billions in federal loans, the White House is creating a Presidential Task Force on Autos to oversee the restructuring of the auto industry, a senior administration official said.

The task force will include members from the Departments of Treasury, Labor, Transportation, Commerce, and Energy, the National Economic Council (NEC), the White House Office of Energy and Environment, the Council of Economic Advisers and the Environmental Protection Agency, the official said.

It will be overseen by Treasury Secretary Tim Geithner and NEC Director Larry Summers.

Geithner will oversee the loan agreements with the automakers.

Teams at the Treasury Department and  the National Economic Council are working with the automakers and stakeholders to prepare for their Tuesday submissions, the official said.
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Treasury Secretary Geithner testified before the Senate Banking Committee Wednesday.

NEW YORK (CNNMoney.com) - A day after unveiling his new financial rescue plan, Treasury Secretary Tim Geithner again went before Congress to defend it.

Watch: Geithner grilled on bailout

Geithner's revised bailout was met with disappointment on Wall Street and with some lawmakers who thought Treasury's plan was lacking in details.

At a hearing held Wednesday by the Senate Budget Committee, senators pressed Geithner to give more specifics about Treasury's new bailout efforts.

"The market has made clear that certainty and stability are commodities of great demand; unfortunately, that is not what we received yesterday," said Sen. Jeff Sessions, R-Ala. "Secretary Geithner, you need to give a detailed plan in clear terms of how we are to proceed. You've had more than a month to work on the proposal, but what we've heard is an outline."

"I hope you can use the hearing today to put some meat on the bones," Sessions added.

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WASHINGTON (CNN) – Partnerships with the private sector - aimed at restoring the flow of credit to families and businesses– will be a key feature of an overhaul of the $700 billion financial bailout to be announced by Treasury Secretary Tim Geithner on Tuesday morning, according to a senior White House official.

The public-private par are expected to buy troubled assets that now clog banks' balance sheets and to provide incentives so banks will start lending again, the official said.

The plan will continue to rely heavily on companies injecting capital into banks, but it will require more from those companies, such as caps on executive compensation. The government also will boost monitoring to make sure those banks use the money to increase lending, the official said. The bailout, launched by the Bush administration, has come under fire for its lack of transparency.

The plan also will commit up to $100 billion of the program's remaining $350 billion to stem the tide of foreclosures, without seeking more money from Congress at this time, the official added.

The official also said the plan will significantly expand a Federal Reserve program aimed at unclogging lending to consumers and small businesses by widening the program to cover other types of loans, such as those for commercial real estate.

NEW YORK (CNNMoney.com) - The "massive overhaul" of the banking bailout will be announced a day later than expected.

Treasury Secretary Timothy Geithner was originally scheduled to give full details about the changes to the rescue plan in a speech midday Monday. But the Treasury Department said Sunday that the plan will be announced Tuesday instead, in order for Geithner to focus on the stimulus bill that is being debated in the Senate.

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Timothy Geithner to unveil new 'Financial Stability' plan Monday.

WASHINGTON (CNN)– Even as the Obama administration struggles to sell a massive economic stimulus plan, Treasury Secretary Timothy Geithner is planning Monday to unveil a separate financial stability plan that could cost hundreds of billions of dollars more to buy up troubled assets from banks and more broadly deal with the credit crunch and foreclosure crisis, according to two senior administration officials.

The officials are billing the move as a major reform of the so-called TARP federal bailout program that was created last fall to try and stabilize the financial system, but has come under withering criticism across the political spectrum.

"It will be an overhaul of the whole program," one senior official vowed about the package being put together Geithner and other top economic advisers to the President.

Officials said the goals of the new plan will include bringing new transparency and accountability standards to the TARP program, keeping people in their existing homes, and increasing lending to consumers and small businesses.

Timothy Geithner to unveil new 'Financial Stability' plan Monday.

WASHINGTON (CNN)– Even as the Obama administration struggles to sell a massive economic stimulus plan, Treasury Secretary Timothy Geithner is planning Monday to unveil a separate financial stability plan that could cost hundreds of billions of dollars more to buy up troubled assets from banks and more broadly deal with the credit crunch and foreclosure crisis, according to two senior administration officials.

The officials are billing the move as a major reform of the so-called TARP federal bailout program that was created last fall to try and stabilize the financial system, but has come under withering criticism across the political spectrum.

"It will be an overhaul of the whole program," one senior official vowed about the package being put together Geithner and other top economic advisers to the President.

Officials said the goals of the new plan will include bringing new transparency and accountability standards to the TARP program, keeping people in their existing homes, and increasing lending to consumers and small businesses.

The President spoke about the economic crisis and executive compensation Wednesday.

(CNN) – President Obama and Treasury Secretary Timothy Geithner announced plans to limit executive pay to companies that accept government bailouts.

Watch: Administration announces pay caps

Earlier: Obama officials reveal pay limits

Read Obama's full remarks after the jump

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WASHINGTON (CNN) - In his first official move as treasury secretary, Timothy Geithner will unveil on Tuesday new rules to crack down on lobbyists for companies that benefited from federal bailouts, according to two senior administration officials late Monday.

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