Geithner: 'New phase' of recovery

Geithner: 'New phase' of recovery

Treasury Secretary Timothy Geithner on Thursday made some of his strongest comments to date that the U.S. economy is on the road to recovery and has turned the page on the worst of the financial crisis.

A year ago this week, the credit crisis erupted in full, prompting the federal government to take a series of unprecedented steps to commit trillions of dollars to support the financial system.

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Geithner, in written testimony before an oversight panel, said on Thursday that the government's efforts are entering a "new phase" of recovery.

"We are now in a position to evolve our strategy as we move from crisis response to recovery," he said. Geithner said that a year ago the country was headed toward a second Great Depression, but that, "today, thankfully, that is no longer the case."

Geithner, who will be making a television appearance on CNBC later on Thursday about the financial crisis, said that the improvements in the financial system were not inevitable.

"It happened because the Obama administration and Congress put in place a comprehensive strategy that was unprecedented in size and scope," Geithner said in written remarks. Congress passed a $700 billion package to support the system last October under the Bush administration, while the Federal Reserve began a range of programs to support various parts of the financial sector.

Geithner said that some of the programs extended to shore up credit markets and guarantee a range of debt have begun to wind down. "As we enter this new phase we must begin winding down some of the extraordinary support we put in place for the financial system," he said.

Still, Geithner said that the administration is battling "unacceptably high" unemployment rates, which recently hit 9.7 percent. The recession began in December 2007, but private forecasters expect the economy to return to growth this year.

The administration is also in the process of pushing Congress to enact a sweeping range of reforms to the financial system. House Financial Services Committee Chairman Barney Frank (D-Mass.) is intent on moving legislation this fall. Senate Banking Committee Chairman Chris Dodd (D-Conn.) said he hopes to pass one comprehensive bill later this year or early next year.