Geithner confident world can deal with oil price spike
Wednesday, February 23, 2011; 12:35 PM
Treasury Secretary Timothy F. Geithner expressed confidence Wednesday that the world economy can successfully absorb any spike in oil prices brought on by political unrest in Libya and the greater Middle East.
Geithner said the dangers to the global economy of disruption to the oil markets are "self-evident" but nonetheless said the challenges are more manageable than many of those that policymakers faced two years ago when global economy began to unravel.
"The world's got a lot of experience in managing the tensions that could come with short-term impact on commodity prices," Geithner told reporters at a Bloomberg Breakfast. He added, "It's not rocket science."
Geithner said the U.S. economy continues to grow stronger, although still not at a pace to put a significant dent in the unemployment rate. He said commodity prices were one of three large challenges facing the world's economies, the others being the state of economies in Europe and the politics of fiscal reform.
Geithner spoke cautiously about the current fight in Congress to pass a continuing resolution to fund the government. "I think both sides recognize that we're at a point where we don't want to take any risk of jeopardizing the recovery underway," he said.
But he declined to discuss further the administration's bottom lines or cite cuts favored by Republicans that President Obama would find unacceptable.
Geithner played down the need to move instantly on entitlement reform, saying a multi-year agreement aimed at deficit reduction over the next five to 10 years is the first and more important step that should be taken by Congress and the administration.
He said that the idea "that the fundamental and the sole challenge of fiscal reform now is entitlement reform is not right," he said.
He noted that provisions in the new health-care law would have a significant impact on the long-term deficit and cautioned that any moves by the Republicans to repeal or undo those changes would result in a significant setback to the cause of entitlement reform.
Geithner said he and other administration officials have been meeting with congressional leaders to begin to gauge the political climate for dealing with the country's fiscal problems, short and long term, but indicated no consensus has emerged.