Geithner: Economy'll Have "Fits And Starts"

Treasury Secretary Timothy Geithner said today it was too early in the economic recovery process to tell if he was going to have to ask Congress for more stimulus money.

Appearing on CBS' Face The Nation, Geithner also said that progress toward correcting the economy "is not going to be even. We're going to have fits and starts. There will be a period where it feels very bad and uncertain."

Among the "encouraging signs" he saw, Geithner (left) pointed to mortgage interest rates which, he said, are now at their lowest point in history.

"Millions of Americans now are going to be able to refinance their homes, take advantage of lower interest rates. That's cash in the hands of the American people, and that's very powerful," he said.

Geithner was asked by host Bob Schieffer, "Do you think you're going to have to ask for more in the way of a stimulus?"

"I can't make that judgment at this time," Geithner said. "Our first priority is to move on the programs that Congress has passed and put those in place as quickly as possible."

Geithner also indicated that job losses may get worse before Americans see improvement.

"The typical pattern of recoveries is that growth recovers, growth starts to turn positive, people start to spend more," he said. "Businesses hire more, they invest more, before you see unemployment peak. That's the crude reality of recoveries. [Employment] lags."

On the issue of toxic assets Geithner said, "Banks have a large incentive now to clean up their balance sheets, to make it easier for them to go raise equity from the markets, from private investors."

Schieffer bluntly asked the Treasury Secretary if anyone knows where the $700 billion in TARP money dispensed to financial institutions has gone.

"Absolutely. We know. It's in the public domain where every dollar has gone," Geithner responded.

"Why is there such disparity with what people say about where this money is?" Schieffer asked.

Geither said he is "not sure … but my obligation is to make sure that we're clear and transparent to the American people about what resources we have remaining, [and] how we're going to use those."

Finally, Geithner was asked about a Washington Post story which said the Treasury Department had set up an "entity" to funnel money to struggling companies which allows executives to avoid pay restrictions.

"That's not true, Bob. Our obligation is to apply the laws that Congress just passed on executive compensation. We're going to do that," he said.

To watch Timothy Geithner discuss economic recovery and the auto industry click on the video player below.

More from Face The Nation (4.05.09):

  • Geithner: Bankruptcy Still Option For GM
  • Read The Complete Transcript> (pdf)

    To watch CBS News chief foreign correspondent Lara Logan and Washington Post reporter Perry Bacon discuss the state of world relations click on the video player below.