Lowering oil prices will require a long-term approach to exploration and production, though tapping domestic reserves is not out of the question, Treasury Secretary Timothy Geithner told CNBC.
Geithner attributed the rise in crude prices, which have sent gasoline above $4 a gallon in some parts of the country to two factors: Better
growth expectations,
along with "saber rattling" from Iran over its desire to advance its nuclear program.Getting gas prices under control this year is critical for President Obama as he prepares for a contentious
re-election campaign ahead."There's no quick fix to this, no short-term fix," Geithner said. "The best strategy for the country is to continue to make some long-term investments, to expand production in the United States, to reduce our dependence on foreign oil, to encourage Americans to use more efficient clean sources of energy, to encourage Americans to be more efficient in how they use energy."At the same time, Geithner would not rule out tapping some of the U.S. strategic petroleum reserve to help bring down
oil, which has surged past $105 a barrel."There's a case for the use of the (reserves) in some circumstances and we'll continue to look at that and evaluate that carefully," he said.Rising oil prices are considered one of two key elements that could derail the U.S. economic recovery.The other is Europe, where a
sovereign debt crisis has played havoc with markets during the past year over concerns that troubles in Greece, Portugal and elsewhere could spread through Europe and ultimately make their way to the U.S. banking system.Geithner repeatedly mentioned a "firewall" that will be necessary from the affected European governments. If the firewall is strong enough to prevent contamination, the U.S. will lend its support to the International Monetary Fund in an effort to help guide Europe, he said."Europe has made a lot of progress...that they are doing to do what is necessary to reduce the risk of a catastrophic failure in Europe," he said. "They've got some more work do, of course. The critical next step for them...is to build a stronger firewall that helps support the broader reforms that are necessary for growth over the long run."Closer to home, the administration is grappling with ways to close a likely $1.3 trillion budget deficit and a national debt zooming towards $16 trillion.Geithner asserted that the White House has proposals that cut at least $3 trillion from the debt and are targeted at addressing the housing sector, which remains the biggest drag on U.S. economic growth.As such, he turned the onus on Congress to approve the administration's proposals."If Congress were to enact those proposals then it would put us much closer to a sustainable fiscal position for the next decade, and that would make broader confidence in the American economy stronger," Geithner said.
![]()
View the original article here
M. Lorden | Taxi | Getty ImagesU.S. Treasury Secretary Timothy Geithner said on Sunday that Europe's actions so far to deal with its debt crisis have averted potential financial catastrophe but said it still must put up a sturdier firewall against contagion."A durable solution requires both a sustained period of economic reform and a substantial financial firewall to support those reforms," he told a press conference at the conclusion of a Group of 20 finance ministers' and central bankers' meeting.The weekend meeting focused on Europe and many G20 participants made clear they want to see Europe put up more money for its own defense against a worse crisis before they chip in with more help through institutions like the International Monetary Fund ![[cnbc explains]](/CNBCexplainsicon1.gif){kind=small}
."There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and the IMF cannot move forward without more clarity on Europe's own plans," Geithner said.The U.S. Treasury chief repeated that he was not prepared to go to Congress now to seek more resources for the IMF because he didn't feel they were needed at this time.He declined to say how big a financial firewall he felt Europe needed to put up now but noted that, in order to be credible in markets, it had to be bigger relative to possible claims that might be made on it.The euro zone countries pledged on the weekend that they would reassess the strength of the bailout fund they now have during March. That could clear the way for other G20 countries to contribute more funds to the IMF.Geithner sounded an optimistic note that some of the European countries seen as most at risk from a potential debt crisis spreading seemed to be getting onto sounder footing."I'm very encouraged by the impact so far of the combined actions of new governments in Italy and Spain doing a very good job of laying out reforms to meet their very formidable economic challenges," Geithner said.He also praised "a very creative and effective" European Central Bank 
Data is a real-time snapshot *Data is delayed at least 15 minutes