WASHINGTON (MNI) – Treasury Secretary Tim Geithner, appearing on
CBS’s “Face the Nation” Sunday, said if the economy keeps improving as
the administration expects, so will the unemployment rate.

Growth, he said, “looks pretty broad based. Most of the available
evidence has been pretty encouraging.”

He acknowledged that the major risk factors remain the state of
Europe and the effect on the oil market of any Iran disruption. “You
know,” he said, “will still live in a dangerous uncertain world.”

Europe, he said, “is still going through a really tough economic
crisis and Iran is still a risk factor in the oil markets. Those things
could hurt us still.”

Nevetheless, “If the economy continues to gradually strengthen like
it’s been doing then the unemployment rate will be lower and more
Americans will be back to work.”

Manufacturing has been “pretty strong, energy very strong,
agriculture quite strong, high-tech very strong, exports pretty strong.
And those are encouraging things but we’ve got a long way to go.”

Geithner declined to forecast what the unemployment rate, 8.2% in
April, will be by the end of the year.

April’s payrolls rose by 120,000, less than expected, after
seasonal adjustment. Before seasonal adjustment they were up 811,000.
But despite the weak adjusted payrolls number, the unemployment rate
improved by a tenth of a point, mostly because the labor force part of
the equation, got smaller.

Geithner defended the so-called Buffett rule proposal, which would
impose a 30% tax rate on anyone making over a million dollars a year. He
said there is “no credible basis” for the argument that raising the
capital gains tax and the tax on investment income would hurt the

“We face a lot of challenges still as a country,” Geithner said.
“We have to get the economy growing, repair the damage from the crisis,
get more people back to work. And we’ve got to make sure we put in place
a balanced plan to bring down our long term deficits. As part of that
we’re going to have to cut spending across the government.”

“I don’t think there is a plausible path to tax reform, not a
plausible path to fiscal reform that doesn’t recognize the reality that
we cannot afford to extend these tax cuts for the most fortunate
Americans. We just can’t afford to borrow to do it anymore.”

Geithner disagreed that the entire Buffet Rule discussion is an
administration attempt to embarrass Republican presidential hopeful Mitt
Romney whose tax rate is around 15% because most of it is the result of
investment income. “I’ve heard that concern. I don’t understand it. I
mean, just because they oppose this doesn’t mean it’s not the right
thing to do, and we’re going to keep pushing.”

Geithner repeated that he’s serving out the rest of the President
Obama’s first term and after that, leave the administration. “The
president asked me to stay and I said I’d stay to the end of the first
term,” he said. “That seems like the right amount of time for me.”

The interview with Geithner was recorded last week, as were
interviews on NBC’s “Meet the Press” and ABC’s “This Week” program.

** MNI Washington Bureau: 202-371-2121 **

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