Published: November 01, 2009 12:48 pm      

Geithner: Economy rebounding, but job growth lags

WASHINGTON — Treasury Secretary Timothy Geithner acknowledges the federal budget deficit is too high, but that the priorities now are economic growth and job creation.

Asked repeatedly on NBC television's "Meet the Press" whether this means taxes will rise, Geithner avoided giving specifics. He did say President Barack Obama is committed to dealing with the deficit in a way that will not add to the tax burden of people making less than $250,000 a year.

The White House has not decided how to reduce the red ink, Geithner said in an interview broadcast Sunday.

"Right now we're focused on getting growth back on track," he said. "And we're not at the point yet where we have to decide exactly what it's going to take."

He acknowledged that the economic recovery, while showing positive movement, has been shaky and uneven.

"A lot of damage was caused by this crisis. It's going to take some time for us to grow out of this. It could be a little choppy," he said. "It could be uneven. And it's going to take awhile."

A bright spot in the recovery identified by Geithner is the banking system, which he said is "dramatically more stable" because of the government bailout.

Geithner said that just one year ago economic activity came to a standstill as major financial institutions shut down due to lack of liquidity.

Even though 115 banks have failed so far this year, Geithner said there has been a "dramatic improvement in confidence," with private capital back in the system. He said large businesses are now able to borrow again.

"The banking system is dramatically more stable than it was three months ago, six months ago, nine months ago, a year ago," he said.

But Geithner said more needs to be done to assist small businesses, adding that the administration is working to help open up credit to them. These businesses, he said, "face a really tough environment on the financing side."