ByÂ Ian KatzÂ -Bloomberg
U.S. Treasury SecretaryÂ Timothy F. Geithner said the Obama administration would oppose any effort to strip the Federal Reserve of its mandate to pursue full employment and warned Republicans against politicizing the central bank.
â€œIt is very important to keep politics out of monetary policy,â€ Geithner said in an interview airing on Bloomberg Televisionâ€™s â€œPolitical Capital withÂ Al Huntâ€ this weekend. â€œYou want to be very careful not to take steps that hurt our credibility.â€
The Republican congressional leadership, includingÂ John Boehner, nominated as the next House speaker, has criticized the Fedâ€™s plan to buy $600 billion in assets, saying it would fuel inflation and asset bubbles. SenatorÂ Bob Corker, a Tennessee Republican who serves on the Banking Committee, said he favors confining the Fedâ€™s mandate to promoting price stability.
Geithner, 49, declined to say what compromise the Obama administration would be willing to consider on extending Bush- era tax cuts, while ruling out making permanent the reductions for the wealthiest Americans.
â€œIt is not responsible, and I could not recommend to the president in good conscience, that we go out and borrow $700 billion to make those high-end tax cuts permanent,â€ Geithner said.
He said he doesnâ€™t think the tax cuts for the middle class will be allowed to expire in December, or that all of the tax cuts, including those for the wealthy, will be extended permanently.
On General Motors Co., Geithner said the government would get back â€œa very substantial partâ€ of its investment and all the money the Obama administration spent on bailing out the automaker. Taxpayers put about $13.4 billion into GM under former PresidentÂ George W. Bushand $36.1 billion under Obama.
GM, which went bankrupt last year after almost a century on the New York Stock Exchange, raised more than $20 billion in an initial public offering Nov. 18.
Asked about Europe, Geithner said a financial rescue of Ireland could mark an end to the continentâ€™s sovereign debt crisis. Officials from the European Union, International Monetary Fund and European Central Bank spent a second day in Dublin yesterday discussing a possible bailout of Irish banks.
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