Geithner says recession over
THE US economy is not likely to slip back into recession but letting tax cuts for the wealthiest Americans expire is necessary to show commitment to cutting budget deficits, Treasury Secretary Timothy Geithner said yesterday.
In appearances on several Sunday talk shows, Geithner said only two to three per cent of Americans – those making $250,000 or more a year – will be affected when tax cuts enacted under former President George W. Bush end on schedule this year. Republicans want to extend the tax cuts and Democrats are divided but Geithner said reductions for top earners should end.
He also said the overhaul of US financial rules signed into law last week by President Barack Obama should bolster confidence in the economy by giving consumers new protections and the government more powers to restrain bank risk-taking.
Geithner said no reforms can ward off all future crises but can mitigate the harm. If the reforms that are now law, including powers to wind down troubled financial firms, had been in place before the crisis, the damage to jobs and fortunes would have been less, he said. But he said there remains work to repair the housing finance system that contributed to the crisis.