Obama job creation: 2010 us budget deficit will have bad consequences for US economy

WASHINGTON, (KUNA): Obama job creation: 2010 us budget deficit will have bad consequences for US economy. US Treasury Secretary Timothy Geithner said on Tuesday that the "immediate focus" of President Barack Obamas 2011 budget is to generate jobs and urged Congress to pass health care reforms to reduce the growing deficit over the long term.

"The US economy is still in the midst of one of the most challenging periods in our nation's history. We have pulled back from the brink of financial collapse and a historic recession", said Geithner in his testimony before the Senates finance committee.

"The overall economy grew at an annual rate of 4 percent over the last six months of 2009, but millions of Americans remain out of work and the economic pain of the recession can still be felt throughout our nation. This crisis has caused enormous damage to the basic economic security of tens of millions of Americans", he added.

The White House unveiled yesterday a USD 3.8 trillion budget that would boost deficit to a record-breaking USD 1.56 trillion.

"The commitment in this Budget to job creation, innovation, investment in the skills of our people and fiscal sustainability is essential to setting the stage for the kind of broad-based economic growth that will provide middle-class Americans with rising living standards and financial security", noted Geithner.

He affirmed that the administration's "most immediate focus" is generating jobs to deal with the 10 percent unemployment rate in the country and urged for passing health care reforms to reduce the growing US deficit over the long term.

"The Administration and Congress have worked hard over the past year on health care and we have no intention of letting the chance for real reform slip away. It is crucial to remember that beyond the difference reform would make to the quality, cost and coverage for tens of millions of Americans, reform would reduce the growth of health care costs", said Geithner.

The budget deficit for 2009 was USD 1.3 trillion or 9.2 percent of GDP and the US Treasury Secretary noted that the Obamas administration "is committed to achieving the goal of deficits that are roughly 3 percent of GDP by 2015".

"This is an ambitious goal. The deficit in the current fiscal year is expected to reach 10.6 percent of GDP. To reach our 3 percent fiscal target between now and 2015, we must lower deficits as a share of GDP by more than they have been reduced in any five-year period during the past six decades", he added.