U.S. to Work on Social Security Reforms - Geithner

Markets Reuters

U.S. Treasury Secretary Timothy Geithner said Tuesday the United States needs to put its massive pension program on a sounder footing but vowed to reject efforts to slash Social Security benefits and subject them to the "whims" of the stock market.

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A day after the White House unveiled a budget that would reduce the deficit by $1.1 trillion over 10 years, Geithner warned Republicans against cutting spending too quickly, calling for gradual deficit reduction to avoid endangering the economic recovery.

"Cutting services and programs too much, too soon would jeopardize the recovery and destroy tens of thousands of jobs," Geithner told the House Ways and Means Committee, which acts as Congress' tax-writing panel.

The Obama administration will work with Congress to consider ideas to strengthen Social Security -- the pension program for the elderly and disabled, Geithner said.

"However, we will reject plans that slash benefits; that fail to protect current retirees, people with disabilities and the most vulnerable; or that subject Americans' retirement savings to the whims of the stock market," Geithner said.

Geithner added, however, that the United States cannot pretend that budget problems are merely the result of the financial crisis, and said restoring fiscal responsibility will require some "real sacrifice that affects all Americans."

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He said he believes that the Obama administration and Congress can find room for compromise, as they did in December in a tax-cut extension deal. The tax legislation was passed by Congress before Republicans took over the House in January and strengthened their minority in the Senate. 

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