WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Wednesday the United States needed more incentives to stimulate job growth and bolster a slow recovery from a “savage” recession.
In televised interviews to argue for President Barack Obama’s latest proposals for business investment tax breaks and infrastructure investment, Geithner said the plan was important to repair the damage caused by the financial crisis and should win broad support among Democrats, Republicans and businesses.
“We are still living with the scars and the damage of that basic crisis,” Geithner told CNBC Television. “And recoveries that follow financial crises by definition are always going to be harder, face greater headwinds, take longer. It’s going to take us a while to dig out of this.”
Geithner told both CNBC and Bloomberg Television that Republican proposals to extend Bush-era tax cuts for wealthy were “irresponsible” because they would require the federal government to “borrow $700 billion from our children.”
With slow job growth and a still-depressed housing market both still important issues in November’s Congressional elections, Geithner was asked, by both networks whether he would stay in his job. He responded by saying that he would serve as long as Obama wants him to do so.
Noting U.S. House of Representatives’ Minority Leader John Boehner’s call for him to resign last month, Geithner told Bloomberg that his wife made the same recommendation first.
Turning to international topics, Geithner said Japan should focus on reinforcing its recovery but he declined to comment on possible currency intervention to curb the yen’s rise.
Asked by Bloomberg television whether he would back a Japanese currency intervention, Geithner said, “My view is that they should be focusing, like we are, on how to make sure they are reinforcing recovery in Japan, doing things to help make economic growth in Japan stronger. That would be good for us, good for Japan’s trading partners.”
The U.S. Treasury chief also repeated his call for China to allow market forces to move the yuan exchange rate higher more quickly, adding that Chinese leadership believes that this is in its interests.
Geithner also said the United States was committed to implementing strong international bank capital rules through the Basel Committee that will curb risk-taking and level the global playing field without choking off lending.
“We want to make sure we do that in a way that does to add to headwinds facing this economy. We want to make sure there’s a long enough transition period so that the major financial institutions of the world can achieve these higher standards for capital without the risks that they face incentives to de-lever, to cut lending that might slow recovery,” he told Bloomberg TV.
Reporting by David Lawder and Glenn Somerville