President Obama's budget plan is about balance, U.S. Treasury Secretary Timothy Geithner told lawmakers on Wednesday.
Appearing before the House Ways and Means Committee, Geithner said the budget provides additional help for economic growth and longer term reforms to improve opportunity and restore fiscal responsibility. It also includes very tough reforms, but with a balanced mix of spending cuts and tax reforms, he added. The economy is gradually getting stronger but there still is a lot of work to do, Geithner told committee members. Despite the slump, the economy has grown at an average annual rate of 2 1/2 percent.
However, households and families still face great challenges, the Treasury Secretary noted. The unemployment rate continues to be high and millions of Americans are living in poverty. Many also struggle to find work and are suffering from the decreased value of their home.
"We will continue to encourage Republicans in Congress to support additional actions to cut taxes for workers and businesses, preserve the jobs of teachers and first responders, put construction workers back on the job, and help more Americans refinance their mortgages to take advantage of lower interest rates," Geithner said.
The plan includes the reduction of projected deficits by about $4 trillion, or roughly $3 trillion on top of the Budget Control Act, Geithner said. Additionally, he said, the President's budget would lower the deficit from just under 9 percent of GDP in 2011 to around 3 percent of GDP in 2018.
"We propose tax reforms that raise revenues because we do not believe it possible to meet our national security needs, to preserve a basic level of health care and retirement security, or to compete effectively in the global economy, without some increase in revenues as part of a balanced plan," Geithner said.
The plan will contribute to growth for a stronger future while also providing immediate help for the average American, Geithner said.
He added, "This plan will not solve all the nation's challenges, but it will put us in a much stronger position to deal with those challenges."
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