U.S. News

Geithner: 2% Growth Rate Won't Cut It on Jobs

Reuters with CNBC.com

Treasury Secretary Timothy Geithner said Wednesday a U.S. growth rate of 2 percent is not  enough to get Americans back to work and that the country had a long way to go to repair damage to the economy.

Timothy Geithner

He said the most helpful thing Washington can do to spur growth is to extend middle-class tax cuts and take the threat of default off the table.

"We need to ... force this town to confront and take on the things that divide us on these long term fiscal reforms, so that we can go ahead and govern, and start to address the many other problem this country faces," the Treasury secretary said.

Geithner made his comments in an interview with NBC's Andrea Mitchell and in a subsequent question-and-answer session at the Council on Foreign Relations. The discussion came a day before President Barack Obama is to give a major speech on the economy.

In the interview, Geithner said it was unfair to look at Germany as the sole source of the problem in resolving the euro zone debt crisis.

He also put pressure on the European leaders to provide some clarity in coming weeks ahead of the June 28-29 EU summit on the contours of a banking union, its growth strategy and how the region will use its bailout funds to protect vulnerable countries.

"Germany is saying make monetary union work. We are prepared to be behind this broader endeavor, you need to be in support of reforms," Geithner said, adding that other countries needed to move toward Germany's position.

Reuters reported Wednesday that draft conclusions for the summit calls for stronger banking and fiscal integration and enhanced governance.

"Recent developments have demonstrated the need to take the EMU (Economic and Monetary Union) to a further stage," said the draft conclusions, obtained by Reuters.

"The new stage will build on deeper policy integration and coordination. There is a need for more specific building blocks centered around a much stronger banking and fiscal integration, underpinned by enhanced euro governance," the draft said.