Geithner: US Economy 'Gradually Getting Stronger'
Treasury Secretary Timothy Geithner expressed confidence in the resilience of the U.S. economy despite Europe's woes, slammed Mitt Romney's approach to China policy and dismissed as "remarkably hackish" a Romney adviser's critique of President Obama's tax policy.
Geithner spoke in an interview with CNBC near Portland after touring a plant that manufactures street-cars, and as he prepares for an address in San Francisco tomorrow on economic relations with China.
"We're gradually getting stronger," Geithner said as new data show the United Kingdom having slipped into recession . "And Europe is doing a better job of managing their crisis."
"The most likely thing you're gonna see is that Europe contains the risk of a major cataclysm," he said. "They can let these reforms take some time to work. And our economy should continue to get gradually strengthened through that."
Geithner criticized as superficial the contention by Romney, the presumptive Republican presidential nominee, that he will improve U.S. trade relations with China by declaring that emerging giant a currency manipulator.
"By just calling them a name?" Geithner asked. "Like you can solve problems in the world, a very complicated world we live in, by calling people names?"
"If it had been an effective way to get change in China, then bipartisan, Democrat and Republican presidents over time would have embraced that basic strategy," he said. "But it had no merit as a basic strategy and does carry the risk of a trade war."
Geithner also rejected GOP claims that Obama's regulatory and tax policies have damaged the economy. He took particular aim at the contention by Romney adviser Glenn Hubbard that Obama's spending commitments would require an across-the-board tax increase of 11 percent on Americans earning less than $200,000 per year.
"That's a completely made up, remarkably hackish observation for an economist," Geithner said of Hubbard. "The president's fiscal reform plan would bring our deficits down to below 3 percent of GDP over the next four years, so that the debt burden stops growing as a share of the economy. We propose a series of tax reforms that would modestly increase the burden, but only on the top 2 percent of Americans. Ninety-eight percent of Americans would see no increase in their effective tax burden."
Geithner also dismissed as a "myth" reports that Obama's appointment of the president of Dartmouth College, Geithner's alma mater, to the World Bank was part of a plan for Geithner to take the Dartmouth job when he leaves the administration at the end of Obama's first term.
A "completely contrived myth," Geithner said. "Played no role in that context."