Friday, March 13, 2009

Treasury's Geithner Testifies on Budget Priorities

On March 3, Treasury Secretary Geithner appeared before the House Ways and Means Committee to discuss the President's Budget. Geithner focused his remarks on:

  • Describing the economic and financial challenges, and discuss how he is addressing them;

  • Laying out the intermediate and long-term threats to the nation's fiscal condition, and explain how the President's Fiscal Year 2010 Budget will return the nation to a sustainable fiscal position; and

  • Explaining how this Budget puts the nation on a path towards energy independence, better educational outcomes, and a reform of health care that both lowers costs and expands access.
Geithner's remarks were notable in their optimism, addressing how the budget and recently enacted stimulus legislation are complimentary, sharing some key goals.

The President's Budget takes up where the recovery plan leaves off, cutting taxes for 95% of working Americans by making permanent the Making Work Pay tax credit of up to $400 for individuals and $800 for families. The Budget provides additional tax relief by expanding the earned income tax credit for lower-income families and extending the American Opportunity Tax Credit that provides up to $2,500 toward higher education. All of these are in the recovery plan that Congress enacted last month, but only in temporary form. The Budget also expands the Saver's Credit as part of the President's commitment to help Americans rebuild their savings.

This optimism is reflected in some of the sunset provisions of the Administration's proposed budget:

By 2011, when the economy is projected to have recovered, it will be important for the nation to put in place policies that restore fiscal responsibility. For this reason, our Budget includes revenue changes that become effective at that time. Those making less than $250,000 will not see taxes increase. The marginal rates for the top 2% of income earners will return to where they were during the powerful economic expansion of the 1990s.

As with the stimulus bill, Geither promised unprecedented levels of public disclosure to provide taxpayers some confidence that they know where money is being spent.

In all of the President's Budget proposals, as in our recovery, stability and affordability plans, we will make good on the imperatives set by the President to operate in the bright light of day so that taxpayers can know how their money is being spent and can hold us accountable.

Secretary Geithner's March 3, 2009 prepared statement to the House Ways and Means Committee is available at: