WASHINGTON (Reuters) - Reassuring lawmakers that U.S. recovery efforts are on track, Treasury Secretary Timothy Geithner said on Monday the United States has taken more action in recent weeks to tackle its economic problems than other countries have done in years.
“We’re doing more in weeks than other countries do in years,” Geithner told Reuters after briefing U.S. lawmakers in a closed-door session on the progress of the Obama administration’s economic stimulus and financial stability plans.
The comments, backed up by over $1 trillion in stimulus and housing support plans launched since Obama took office, underscore a potential rift between the United States and Europe over stimulus spending.
Earlier on Monday, European officials rejected a call from top White House economic adviser Larry Summers for other countries to step up their spending to combat recession.
Geithner, who has faced criticism and a Saturday Night Live parody over the Treasury’s deliberations on how to fix the banking system’s problems, said Democratic lawmakers were supportive of the administration’s actions to restart the flow of credit.
“I just wanted to lay out the president’s economic agenda and make it clear that we’re going to move with as much urgency as possible,” Geithner said. “You had a lot of support in that room for the imperative of action, particularly getting the credit markets working again, which we all share.”
Members of the U.S. House of Representatives Democratic caucus said Geithner told them that the $787 billion stimulus package, along with actions to stabilize housing and repair a damaged banking system, would restart growth in the shrinking U.S. economy.
“Secretary Geithner believes that it is working,” House Majority Leader Steny Hoyer told reporters. “This is not going to happen overnight and we need to stay the course,”
But he also said lawmakers expressed “great concerns” about the amounts of taxpayer money involved and the effectiveness of the Obama programs.
But Geithner offered lawmakers no new details on his much-anticipated plans to remove bad assets from bank balance sheets, nor on how much in additional funds the Treasury would request from Congress to repair the financial system.
The Obama administration included in its 2010 budget plan a “placeholder” provision that could allow the Treasury to funnel an additional $750 billion in new aid to the banking sector, but the actual amount of the request will be determined at a later date.
U.S. Rep. Patrick Kennedy, a Rhode Island Democrat, said Geithner reassured lawmakers the Treasury intends to use taxpayer dollars to leverage more private funds as much as possible.
Although Geithner did not disclose details of a public-private investment fund to purchase bad assets, Kennedy said it would likely involve ”some kind of insurance mechanism that would allow the private marketplace to come in do this in partnership with a federal guarantee. So that’s certainly some of the direction that we’re talking about.
In the Saturday Night Live skit, a Geithner impersonator offered toll-free hotline callers a $420 billion cash reward if they could come up with a workable plan to fix the banks.
U.S. Rep. Sander Levin, a Democrat from Michigan, said Geithner told lawmakers that resorting to bankruptcy for major financial institutions was undesirable.
“I think that this administration is committed to every imaginative approach to bring about restructuring without bankruptcy,” Levin said after the meeting, adding that he believes this approach also applies to Detroit automakers General Motors Corp (GM.N) and Chrysler LLC.
Asked whether he was reassured by Geithner, Levin said, “What do you want -- six weeks to resolve the deepest hole that this world has seen economically?” he said, “They’re determined to make it work.”
Reporting by David Lawder; Editing by Gary Hill and Anshuman Daga