Economy Can Handle Higher Gas Prices: Geithner

Economy Can Handle Higher Gas Prices: Geithner



The U.S. economy is in a better position to deal with high gasoline prices, Treasury Secretary Timothy Geithner said on Sunday, adding that unseasonably warm winter had lowered overall energy costs for consumers.

"The economy is in a much better position to deal with those pressures ... because natural gas prices are down, the overall cost of energy for consumers is down," Geithner said on ABC's "This Week" program.

A spike in gasoline prices caused economic growth to brake sharply in the first half of last year. Gasoline prices have risen 64 cents since the start of this year, leaving many Americans with a sense of deja vu, which was further reinforced by a slowdown in the pace of job creation last month.

However, Geithner said it was too early to tell whether the economy, which he described as getting stronger, would go through a repeat of last year.

"We can't tell yet. Obviously, we've got a lot of challenges ahead and some risks and uncertainty ahead. And some of those risks are, of course, Europe is still going through a difficult crisis," he said.

He also dismissed suggestions that the country's huge budget deficit put it at risk of being the next Greece, adding that the challenge was to bring the deficit down without compromising economic growth.

In a separate interview, Geithner said a proposal to impose at least 30 percent income tax on Americans making more than a million dollars a year will not hurt the economy by stifling investment and growth.

"No credible basis for that argument, in my judgment," Geithner said on CBS's "Face the Nation."

"I don't think there is a plausible path to tax reform ... that doesn't recognize the reality that we cannot afford to extend these tax cuts for the most fortunate Americans," he said.