Geithner Sees Growth In Economy

(Wall Street Journal) - The US economy is likely to grow two percent to three percent this year, Treasury Secretary Timothy Geithner said Sunday, though he warned of the continuing challenges posed by Europe's inability to stem its financial crisis and growing tensions with Iran.

Geithner, appearing on CNN's "Fareed Zakaria GPS," said US consumers and businesses are still in the process of recovering from the 2008 financial crisis, noting that "we still face tremendous challenges as a country." He played down criticisms from business groups and many Republicans, however, that US businesses are struggling because of regulations put in place by the Obama administration.

"I think if you look at the basic health of the American business sector, it's much stronger than I think anybody would have thought at the peak of our crisis and stronger than many of us hoped," Geithner said, noting that business investment in new equipment and software, as well as exports, is on the rise.

Geithner also weighed in on the issue of taxes, which has become a flashpoint in the Republican race to win that party's presidential nomination and was a central theme of President Barack Obama's recent State of the Union address. He said the administration is laying out the central principles of its plan to overhaul the tax code -- closing loopholes and raising taxes on the wealthiest Americans -- as a step towards a broader tax plan.

He insisted that any broad-based tax reform would have to result in higher revenues.

"When we do tax reform, we're going to have to be helping contribute to deficit reduction. We don't have the ability of offering the American people or the American business community a net tax cut," Geithner said.

Read more: Wall Street Journal