Treasury Secretary Timothy F. Geithner said President Barack Obama’s $447 billion jobs plan would provide a “substantial” boost to the U.S. economy.
“I think we’ve got a good chance of continuing a moderate pace of growth coming out of this crisis,” Geithner said today in an interview with Bloomberg Television in Marseille, France. If Congress approves the plan, “it would dramatically reduce the risk of a long period of much weaker growth.”
The president, speaking before a joint session of Congress yesterday, demanded that lawmakers act “right away” on his plan boost spending on infrastructure, stem teacher layoffs and cut in half the payroll taxes paid by workers and small-business owners.
“It would make a very substantial contribution to growth at a time when we need it to help get hundreds of thousands and more Americans back to work more quickly,” Geithner said in the interview. “Of course the impact it has depends on what Congress does, so we would like them to do as much as they can as quickly as they can.”
Geithner also expressed optimism about the reaction of congressional Republicans.
“They were pretty encouraging last night in their initial response,” Geithner said. “They recognize, and this went into the design of the package, that large parts of this package have had support from Republicans in the past.”
Asked about the downgrade of the U.S. credit rating by Standard & Poor’s last month, Geithner said financial markets have given the nation a vote of confidence.
“There is enormous confidence around the world that this country, our country, is stronger than our political system looks today,” he said. “We’ve got to get the political system to catch up to the underlying strength of the economy.”
After a partisan fight over the deficit and raising the government’s debt limit took the country to the brink of default, Standard & Poor’s lowered the rating to AA+ from AAA on Aug. 5. As part of raising the debt limit, Congress created a 12-member supercommittee to find $1.5 trillion in cuts.
The government’s borrowing costs fell to record lows as Treasuries rallied. The yield on the benchmark 10-year Treasury note fell from 2.56 percent on Aug. 5 to 2 percent yesterday. Moody’s Investors Service and Fitch Ratings affirmed their top rankings on the U.S.
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