Uncertainty Surrounding Tax Cuts Could Impede Recovery; US Treasury Secretary Says

US Treasury Secretary Timothy Geithner said on Wednesday, to Bloomberg Television's Chief Washington Correspondent Peter Cook, that the proposal presented by President Obama at Ohio was highly significant. It is important that the small business incentives are passed by the Congress. He added that there was a need to ensure that the middle class tax cuts are extended, so that “hundreds of millions of Americans” did not have to worry about tax hikes in a struggling economy. Geithner said these initiatives were good for both long- and short-term growth. On being asked about whether the tax reductions were the right move to trigger job growth, US Treasury Secretary said, “…overall investments spending in the economy is still not that strong and there is a long ways to go still, and again it’s one of the most important things that we can do not just to solve the crisis, but get people back to work and make sure that we are focused on the long-term, making the United States grow more rapidly in the future too." Addressing the possibility of a double-dip recession, Timothy Geithner called the current phase of the economy as a continuation in “the process of healing.” He pointed out that job growth in the private sector had been rekindled faster than what was experienced in the previous two recessions. He added that many segments of the US economy “is still suffering from the scars caused by the crisis” and that the healing would take time. When asked about the scepticism surrounding the ability of the Obama administration to get the economy back in shape, US Treasury Secretary said that the actions taken were “enormously powerful and effective in breaking the back of this financial crisis and starting the process of recovery.” He reiterated that job growth in the private sector had begun sooner than many expected and sooner than prior recessions. “Again, our job is to make sure that we're doing everything that we can, recognizing that we don’t have unlimited resources…. Again making sure that we do everything we can to accelerate that process and get Americans back to work.” Referring to the Bush tax cuts, Timothy Geithner said that it was important to “make it crystal clear that we’re going to extend those tax cuts that go to about 97-98% of working Americans across the country.” He added that waiting, so that the tax cuts could be extended for the richest 2% of Americans, was an unfair and bad policy and that “uncertainty would be damaging for a recovery.” Read more

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