May 17 (Bloomberg) -- Treasury Secretary Timothy F. Geithner said the U.S. economy still faces challenges from the aftermath of the financial crisis and the “damaging” situation in Europe.
“We still have a lot of work to do to repair the damage from the crisis and get more Americans back to work. And we still face some risks ahead,” Geithner said in a speech in Baltimore today. “We still live in a dangerous and uncertain world, with Europe confronting a severe and protracted crisis.”
Geithner’s comments came as the European debt crisis mounted on concerns that Greece may leave the euro area. Greece’s impasse over forming a government has raised the possibility of another election to be held as early as next month, threatening the implementation of austerity pledges under the international financial rescue plan.
Geithner also warned that the economy continues to face the threat of higher oil prices.
“The world is engaged in a critical struggle with Iran, which has added to upward pressure on oil prices,” Geithner said.
In the U.S., Geithner urged Congress to take steps to speed up the recovery. Congress can help “Americans refinance their mortgages, creating incentives for companies to bring jobs back from overseas, putting veterans back to work, creating jobs by investing in clean energy, and cutting taxes for small businesses,” Geithner said.
Geithner said the challenges facing the U.S. economy “cannot be solved by an economic agenda of severe, immediate austerity, combined with deep, permanent cuts in education and the safety net for retirees, caps on spending that could not plausibly accommodate the 25 million Americans who become eligible for Medicare and Social Security over the next 15 years.”
He urged Congress to “act quickly to prevent interest rates on student loans from doubling this summer and pass a transportation bill to put thousands of construction workers back on the job.”