Strong Dollar Is 'Always' in US Interests: Geithner
Reuters
| 26 Apr 2011 | 10:03 AM ET
Treasury Secretary Timothy Geithner said on Tuesday a strong dollar "will always be" in U.S. interests and that the Obama administration would not undercut the greenback to spur growth.
"Our policy has been and will always be, as long, at least, as I'm in this job, that a strong dollar is in our interests as a country. And we will never embrace a strategy of trying to weaken our currency to gain economic advantage at the expense of our trading partners," he said in response to a question after a speech to the Council on Foreign Relations.
Touching on the fiscal debate swirling in Washington, Geithner also said the United States is in a better position than other advanced nations to manage its fiscal issues.
He noted entitlements, such as Medicare and Medicaid, were a smaller share of spending in the U.S. than in other countries.
Geithner said the chances of agreement by Democratic and Republican leaders on a path of fiscal restraint were better now than they had been at any time in the past decade.
"We are a much younger country than the other major economies, we have much better underlying growth rates ... we started with a much lower overall debt burden as a share of our economy," Geithner told the conference in New York.
"The size and expense of our commitments in the safety net are a much smaller share of the economy as a whole so we are in a much better position to manage through this."
He added he was confident Congress will raise the U.S. debt ceiling, and said the harder issue was establishing fiscal rules to ensure future deficit reduction.
"I'm completely confident that they'll do what's necessary," Geithner said. "What I want to make sure they don't do is to take us too far into June, take us too close to the edge ... At a moment like this, you don't want to leave people with any concern that they'll take too much time."
"The harder thing ... is how you legislate a framework that can lock in meaningful fiscal reforms that get these deficits down to a sustainable level," he said.
The White House has called for $4 trillion in deficit reduction to be phased in over 12 years or less. Likewise, top House Republicans are in favor of cutting $4.4 trillion in budget deficits over the next decade.
Debates over how to get the country's fiscal house in order are coming to a head with Republicans threatening not to allow the Treasury to borrow more unless the government makes deep cuts to spending.
The deadline to raise the debt ceiling or legal amount the U.S. can borrow is looming and Geithner has already warned of catastrophic consequences if Congress fails to do so by mid-June.
Treasury predicts the $14.3 trillion debt ceiling will be reached by May 16. The department then has about 8 weeks to employ emergency measures to give the country more room to borrow before the United States begins to start defaulting on its loans and other obligations.
Obama has proposed a debt trigger to force spending cuts if debt levels do not decline as planned.
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