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He was asked at a press conference following a Group of 20 meeting for his reaction to House approval of measures that will cut spending by about $61.5 billion from current levels in a move seen as a challenge to the Obama administration to show it is serious about reducing deficits.
The House action is expected to be stopped by Obama or Democrats in the Senate, but it points to a growing possibility of government shutdowns if a compromise is not worked out by March 4, when current funding expires.
“In our judgment, the continuing opposition…in the House would undermine and damage our capacity to create jobs and expand the economy,” Geithner said.
The United States has faced international criticism for running huge budget deficits that it finances through borrowing from abroad. Geithner told the G20 the Obama administration’s budget for 2012 will meet its G20 commitment to halve fiscal deficits by 2013 and stabilize debt-to-GDP ratios by 2016.
Republicans claim the Obama administration needs to show it is serious about cutting spending and are trying to force the issue in Congress.
Geithner said the country was at “the beginning of a very important national debate” on its finances but said the economy must first regain its health so that Americans can start to live within their means.
He suggested the economic recovery now under way from the 2007-2009 financial crisis still needs to be strengthened, after which it will be easier to tackle deficits.
“I am very confident that the Democrats and the Republicans will come together on a program to not just reduce spending but reduce long-term deficits,” he said.
Copyright © 2011 Reuters