ABCNews' Matthew Jaffe reports:
When Treasury Secretary Tim Geithner returns to Capitol Hill Thursday for his second hearing in two days, he plans to outline the importance of the Obama administration's budget proposal in aiding the country's economic recovery and reforms.
Specifically, Geithner will emphasize the need to reform the tax code, create jobs by beefing up the Community Development Financial Institutions Fund, and promote fiscal responsibility, according to the Treasury Department.
In recent weeks, the administration's budget has been met with withering Republican dissent, while their crackdown on off-shore tax havens has found fierce opposition among multi-national US companies.
"We live in challenging times," Geithner will tell the House Appropriations Subcommittee on General Government and Financial Services. "President Obama and his Administration are working to meet these challenges by getting Americans back to work and getting our economy to grow again; by putting our fiscal house in order in order to sustain recovery once underway; and by making the long-neglected investments in health care, energy and education necessary to enhance America's global competitiveness and produce a more balanced, sustainable growth over the long-term."
Noting the need for speed, Geithner will tout the Department's swift implementation of tax provisions, but also their proposed new tax policies.
"Treasury has moved quickly to implement the more than 30 tax provisions of the President's economic recovery plan," Geithner will tell lawmakers. "It has played an integral role in designing the tax provisions of the President's Fiscal 2010 Budget, and will play a similar role in implementing them… As part of our efforts to make sure that the tax system is working for recovery and is operating fairly, we have designed new policies to curb the use of off-shore tax havens; close the international tax gap; remove tax incentives for companies to shift jobs overseas, and replace these incentives with ones that encourage creation of jobs at home."
"Some $137 million would be devoted to more than doubling our Community Development Financial Institutions Fund to ensure that the benefits of our financial repairs reach beyond our major banks and businesses to help economically distressed communities," the Treasury chief plans to state. "These communities were underserved by our financial system even before the current crisis, and have been deeply hurt by the job losses and business failures that the crisis has spawned…"
Along with outlining the administration's proposed additions to the budget, Geithner will also stress the need to make various cutbacks at the same time.
"As we seek these additional funds to respond to our nation’s troubles, we have cut back on some programs that are either ineffective or that we believe can be safely delayed," Geithner will note. "For example, while the Earned Income Tax Credit continues to be one of the most effective anti-poverty programs that the federal government administers, a related program that provides EITC benefits in advance of filing a tax return has been prone to exceptionally high levels of error and a low use by those eligible for it. So our Budget proposes to end this latter program for savings next fiscal year of $125 million. Similarly, even as we seek to increase capital investment for the IRS, our Budget would reduce the Department-wide capital investment account by 65% for a savings of $17 million."
Thursday's hearing before the House panel is scheduled to start at 10am.
- Matthew Jaffe