Geithner staying at Treasury, says Congress ‘owns the credit rating’

Timothy Geithner told President Obama that he plans to remain in his position as Treasury secretary, ending weeks of speculation that he might leave, and began working to reassure investors after the nation's first credit downgrade.

Sunday evening in an interview with NBC News's John Harwood, Geithner explained his decision to stay at Treasury.

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"I believe in this president, John. I believe in what he's trying to do for the country. I love my work. And I think if a president asks you to serve, you have to do it," said Geithner.

Geithner also had tough words for lawmakers. "Congress ultimately owns the credit rating of the United States. They have the power of the purse on the Constitution. And they're going to have a chance now to, to earn back the confidence of investors around the world."


He argued that the protracted debt-ceiling negotiations had factored into Standard & Poor's decision.

"I think it left people to wonder whether this political system was going to be up to the challenges facing the country. It caused a lot of damage and that's going to take a long time to heal that damage," he added.

In his interview, Geithner followed his administration colleagues in denying White House responsibility for S&P's credit downgrade and pushing back against the credit rating firm.

When asked if the administration's policies were "in any way responsible" Geithner responded "absolutely not," adding later that he had been "surprised" by the decision.


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"I think S&P has shown really terrible judgment and they've handled themselves very poorly. And they've shown a stunning lack of knowledge about basic U.S. fiscal budget math. And I think they drew exactly the wrong conclusion from this budget agreement," he said.

S&P, the credit rating firm, reduced the nation's rating Friday from AAA to AA+. The firm said the recent plan to raise the debt limit while reducing the debt "falls short" of expectations and said they were "pessimistic" about the ability of Congress and the White House to reach a broader plan to rein in the deficit "any time soon."

The Treasury secretary however insisted U.S. treasuries were as safe as before the downgrade. 

"The judgment by S&P changed nothing. It added nothing to what people know about this country. Again, there's no risk the U.S. would never meet its obligations," Geithner said.

"Treasuries are the most — these days the most liquid — the strongest place to put your money at a time like this."

Investors are looking ahead to see how markets react to the downgrade after a volatile week on Wall Street and continuing concerns over the nation's unemployment rate and debt troubles in Europe.

White House press secretary Jay Carney said Obama is happy Geithner will remain in his cabinet.

"The President asked Secretary Geithner to stay on at Treasury and welcomes his decision,” Carney said.

“Secretary Geithner has let the president know that he plans to stay on in his position at Treasury. He looks forward to the important work ahead on the challenges facing our great country,” said Jenni LeCompte, assistant secretary for public affairs at the Treasury Department.

Geithner is keeping his job despite mounting criticism from Republicans, who have called for his ouster.

House Speaker John Boehner (R-Ohio) called on Obama to ask for Geithner’s resignation during a speech to the City Club of Cleveland in August of last year. On Saturday, an aide to Boehner told The Hill that his boss still wants Geithner gone.

Several Tea Party Republicans called for Geithner to step down after Standard and Poor’s downgraded the nation’s credit rating Friday.

Rep. Michele Bachmann (R-Minn.), who is running for president, and Sens. Jim DeMint (R-S.C.) and Rand Paul (R-Ky.), members of the Senate Tea Party Caucus, have demanded Geithner be replaced.

"The President should demand that Secretary Geithner resign and immediately replace him with someone who will help Washington focus on balancing our budget and allowing the private sector to create jobs," Sen. Jim DeMint (R-S.C.) said in a statement Friday. 

Geithner has taken criticism from conservatives for downplaying the risk of a downgrade.

In April, he said there was “no risk” the U.S. would lose its top credit rating after Standard & Poor’s lowered its outlook on U.S. debt to negative.

The New York Times reported on Thursday that Geithner was expected to stay through Obama’s first term, countering weeks of speculation that he would leave. His decision was not official until he informed the president.

-- This story was posted at 3:02 p.m. and has been updated.

-- Meghashyam Mali contributed to this story.