mr. geithner. my time is almost over. i would like to put in the record that europe has the ability to avoid the debt crisis, geithner, and a direct quote was that the european union has the ability to avoid a worsening crisis and speak with one voice about plans to solve their debt problems. i have no time left but yes or no, chairman bernanke, do you agree with that statement that europe has the ability to solve this debt problem? >> certainly have the economic and financial resources, as pointed out, about the same size as that of the united states. they face very difficult political problems, getting agreement among 17 countries on a path forward. but -- so it's not going to be easy. but, yes, i do think they have the capacity. >> thank you. >> mr. mehan from pennsylvania, five minutes. >> thank you, mr. chairman. let me express my appreciation to both of you, as public servants for make iing this commitment you have at a very challenging time for our nation and our world. i'm grateful for your efforts. there are many

mr. geithner for being here today. and just to follow up on a couple of questions with regards to the economy of europe. it seems to me that we have in place a plan and you say the pressures have been released and are lessened, anyway, from what people thought was going to happen. but actually has debt started to decrease at all? >> good question because many people pointed out when growth weakens because of the shocks of the crisis, then that tends to increase the level of debt relative to gdp. but these countries have dramatically reduced the size of their actual deficits and projected deficits. >> so what they've done is actually get their budgets under control, but the amount of debt has not started to go down because their economies haven't gotten to a point where they can start paying down, is that accurate? >> in some countries it's starting to come down, in others, it's going to take the debt a while to come down. but the deficit's coming down as a necessary path to that. >> they have a path to get themselves o

mr. geithner? sizzle number two, can stocks trump oil? i say yes, they can. unless mr. obama doesn't get our iran policy right. obama meets with israeli prime minister netanyahu on monday. and four days to go until super tuesday. has the improving economy already decided the election in obama's favor? pundits say yes. i think not. let's get right to our top story tonight. the dire warning from fed head ben bernanke this week. he told congress that our economy faces a perfect storm at the end of the year threatening our prospects for growth and recovery. take a listen. >> under current law on january 1st, 2013 there's going to be a massive fiscal cliff of large spending cuts and tax increases. i hope that congress will look at that and figure out ways to achieve the same long run fiscal improvement without having it all happen at one date. >> all right. so as the country's debt and spending continues to skyrocket, my question tonight really are we heading for this fiscal cliff come january? you have jillian epstein, foreign chief minority council to the house committee.

mr. chairman. and thank you, sect geithner and chairman bernanke for being here. every country and every culture, of course, is very different and it's very risky to go looking at cultures whether it's greece or some cultural country that you perhaps admire. i want to -- i do want to ask you about germany. we are -- there are some in the congress who believe that the way out of our present recession and dilemma is to impose draconian cuts repeatedly. even forsaking the budget deal, that was very difficult to reach was reached at a huge sacrifice, the loss of our aaa rating. the -- i look to europe. this was a worldwide recession. and look at the difference among the various countries. the british seem to have adopted something of that approach. approach to emphasize retrenchment over growth. i'm intrigued by germany. everybody's favorite example of the strongest economy in europe, perhaps the strongest in the world today. and do not understand and believe we need to come to grips with the theory that they have embraced during this recession. they are one of the fe

mr. dimarco should be doing principal reductions now, but he has refused. now, secretary geithners with mr. dimarco and the treasury has now offered triple incentives for principal reductions. can you tell us why treasury is doing that and why are these incentives important? >> well, i should point out that under the law, the treasury and the administration did not have any authority to compel the fhfa to undertake specific activities. under the conservatorship mandate, they have to make sure they meet a very tough test, appropriately so, to make sure the things they are doing are in the interest of row deureducing losses to the taxpayer. there are situations where we think there's a strong economic case for principal reduction as part of a strategy to limit the future losses to the gses so we've been having some discussions with him about how to narrow the differences between us. but he'll have to make these choices. and i think maybe on this question, it would be better for me to come back and talk to you in more detail about it separately. maybe in a couple weeks we could give

mr. geithner, we have the energy secretary, and we have the president all making comments that would lead american people to believe that you're not supporting lower energy costs, but policies that will actually increase the cost of energy. >> i don't think it would lead them to believe that. i think the question you asked in the beginning, the policies that the president is promoting are helping to facilitate a huge expansion in oil and gas in the united states, a significant reduction in our dependence on foreign sources of oil, and the big expansion -- our ability to use other sources of energy over time. >> let's talk about the change of oil production in the u.s. okay. i don't want to talk about private lands or state lands, i want to talk about federal lands. it's fair to say that from 2010 to 2011, there's actually been 11% decrease in oil production on federal lands, is that correct? >> well, as you know, i'm not the secretary of energy, but i'd be happy to give you their view, his views on those basic questions if that would be helpful. i'd be happy to do that. >> you don't conte

mr. dimarco should be doing principal reductions now but has refused. secretary geithner, i know you are in negotiations with mr. dimarco and the treasury has now offered triple incentives for principal reductions. can you tell us why treasury is doing that and why are these inseptemberatives important? >> well, as you point out that under the law, the treasury and the administration do not have any authority to compel account fhfa to undertake specific activities and under the conservatorship mandate they have to make sure they meet a very tough test appropriately so to make sure the things they're doing are in the interests of reducing losses to the taxpayer, maximizing overall returns to the taxpayer. but there are certain cases where we think there's a pretty strong economic case for principal reduction as part of a strategy to limit the future losses to the gses. so we've been having some discussions with him about how to narrow the differences between us. but he'll have to make these choices. i think maybe on this question, it would be better for me to come back and

mr. geithner to put it towards the deficit.nd i would challenge the likes of the warren buffetts of the world to give an equal proportion of their net worth to the same issue. and i think that would be a great thing. >> so you put uncle sam essentially in the who it's to line for the check, right? as for the treasury market, i know everyone's talking about what's going on with the megamillions jackpot, but in terms of the treasury market, what's going on, rick? >> it's hard to get information. i'm serious. the guy i bought my ticket from said that his hand was numb because he hasn't stopped issuing and putting it in the machine for about five hours today. but the traders down here what they're really talking about is how bundes bank is not accepting bank notes from the likes of countries portugal, greece and ireland because they took bailouts. and this is a big deal. we're going to continue to monitor the effects it might have on the marketplace. >> mary, we're looking at the biggest jackpot in the world, in history. is anyone

mr. geithner, we have the energy secretary, mr. chu, and the president all making comments that would lead the american people to believe that you're not supporting lower energy cost, but policies that increase the cost of energy. >> i think the question you asked at the beginning, and i'll repeat it again is that the policies the president is promoting are helping to facilitate a huge expansion in oil and gas exploration in the united states -- >> let's talk about that quickly -- >> our ability to use other sources of energy over time. >> let's talk about the change of oil production in the u.s., okay? i don't want to talk about private or state lands, but i want to talk about federal lands. it's fair to say from 2010-20 # 11, that's been 11% increase in oil production on federal lands; is that correct? >> well, as you know, iemg not the secretary of -- i'm not the secretary of energy, but i'm happy to give his views on basic questions. if that's helpful, happy to do that. >> you don't contest production on federal land decreased?

mr. geithner. my time is almost over. i would just like to put in the record that i have been researching you. you have been very positive about the crisis. europe has the ability to avoid the debt crisis. geithner any direct quote -- "the your opinion has the ability to avoid -- the european union has the ability to avoid a crisis." and you urged eu members to speak with one voice about plans to solve their debt problem. do you agree with that statement, that europe has the ability to solve this debt problem? >> this certainly have the -- they certainly have the economic and financial resources. their economy is about the same size as that of the united states. they face very difficult political problems, getting an agreement among 17 countries on a path forward. so it will not be easy. but, yes, i do think they have the capacity. >> thank you. >> mr. man from pennsylvania is recognized for five minutes. >> let me express my appreciation to both of you as public servants for making this commitment that you have at a trem

mr. geithner, mr. summers and sperling to get out on the court often to try to -- so it was a deep honor to introduce our speaker, dr. alan krueger. [applause] >> thanks jay very much for that kind and detailed introduction. kind of a walk down memory lane for me. i forgot livingston high school. i should point out the class ahead of me was jason alexander who starred in "seinfeld" and the class on the other side is chris christie, now the governor. as for tennis, i tried but did not succeed so much in getting my colleagues out to play although it was very nice to be able to take a break with people who you work with and do something athletic, or we thought it was athletic. i want to begin by commenting on the importance of business economists for us economists who work in the policy arena. compared with academic economists, which is the group i know most well, business economists are much more in tuned to current developments in the economy and puzzled about economic performance. business economists a

mr. geithner. my time is almost over. i would just like to put in the record that i have been researching you. you have been very positive about the crisis. europe has the ability to avoid the debt crisis. geithner any direct quote -- " the your opinion has the ability to avoid -- the european union has the ability to avoid a crisis." do you agree with that statement, that europe has the ability to solve this debt problem? >> this certainly have the economic and financial resources. their economy is about the same size as that of the united states. they face very difficult political problems, getting an agreement among 17 countries on a path forward. so it will not be easy. but, yes, i do think they have the capacity. >> thank you. >> mr. man from pennsylvania is recognized for five minutes. >> let me express my appreciation to both of you as public servants for making this commitment that you have at a tremendously challenging time, not just for our nation, but our world. i am grateful for your efforts. of this a, there

mr. geithner, i really think regulation is something we need to pay a lot of attention to. lot of different ways. it was regulations in a way that caused many of the cds problems, the enron exemption, how they allowed certain derivatives to be included in certain tiered capital category. this was caused by regulation. second issue is the free lunch loop i think is loopy. you know, you can look at countries, you can look at greece, italy, look at spain. it seems to easy to bring it down to this level, this percentage of gdp, but making the people that really are the country not only do it, but do it in a way where you package it as something palatable will be no easy job. carl, in this country we'll get to that point as well. we need our leaders to be very honest. it's going to be a bumpy ride, and last but not least, ism, we never did a post mortem this is what energy prices will do in the next set of surveyor numbers. >> prices paid, highest since june, and your point is that data is fresh out of the oven, and that it's going to feed that argument that growth will slow as

mr. geithner, you testified that ireland and portugal ran a large surpluses but they were victims of therisis contagion. you also noticed that spain reduced its structural deficit through austerity measures. do you believe that there is a lesson that's -- some lesson in that? i would think that to have this kind of crisis, it would be deeply in the whole of debt. how does that work? >> you are right. i think the popular perception is that the crisis in europe is overwhelmingly the result of dust -- a tickets of fiscal profligacy. that is not quite right. it was certainly true increase where greece -- it was certainly true in greece. >> i will come back to greece. >> there are other countries where you saw a rise in private borrowing in the banking system by the private sector. a damaging loss in the relative competitiveness of their businesses relative to germany in that context. when the crisis hit and confidence eroded, their fiscal positions did deteriorate dramatically, as always happens in that context. but the fundamental cause of the crisis was not a long time of extreme fiscal pr

mr. chairman. and welcome, secretary geithner. title five of the dodd-frank act created the federal insurance office, the treasury, and in conjunction with the trade representatives, one of the most important missions is to strengthen the international competitiveness of the u.s. insurers and reininsurers. and to represent the the united states international forums and increase influence in the development of international standards. in your opinion, does it have the adequate staffing and other resources to successfully carry out this international mission? >> i believe so. if that were not the case, we would fix it. we have listened carefully to concerns that they have. i'm personally committed to making sure that office has the resources it needs. >> they were required to submit two supports in september, one in january. they're late. when will we see the reports? >> they're coming. i apologize that they're behind. that's not really a resource question. they just want to do it carefully. >> okay. then i would like to go back to

treasury secretary tim geithner spoke at the economic club of new york last thursday about the health of the u.s. economy. after his remarks he took questions at this 45-minute event. mr. kbiet ner is introduced by the chairman of the economic club andrew tish. >> timothy geithner and chairman of the economic club of new york, andrew tish. [ applause ] >> good evening. i want to welcome you to the 419th meeting of the economic club of new york. 105th year. the economic club of new york is the nation's leading np economi. more than 1,000 speakers have appeared before this club in more than a century. establishing a strong tradition of excellence and importance. this tradition supported by the contributions from 158 members of the club's centennial society. their names are listed in the program and i thank you. tonight, we are pleased to welcome back to the club treasury secretary timothy geithner. secretary geithner last spoke to the club in june of 2008 when he was a club trustee and more importantly he was president of federal reserve bank of new york. secretary geithner was sworn in as the 75th secretary of the united states treasury on june 26th, 2009. he previousl

mr. secretary, thank you very much for being here tonight. one of my favorite geithner quotes is we save the economy, but we lost the public in doing it. we spoke to the first half of that in your remarks but not the second. i'm not looking to draw you back then. but rather to get your thoughts on whether it's possible and if so how to get the public back. >> it's first remembering that people saw their lives up ended by a set of choices mostly they did not make. and they saw the world burning around them. a broad run on the first time in memory that people faced the risk of losing their savings or this depth of loss and wealth and employment. and the they saw the government forced to act to rescue the people they thought were responsible fairly on unfairly. and they were angry. understandably angry and scared and frustrated. and i don't think there was any path through this that would have made it easy to do the things we needed to do to solve the crisis and at the same time win at that time broader public support. i say this because if you look back at the history of

mr. timothy geithner and sommers to get out on the court often to try to bring some of the tension.it is a deep honor to introduce our speaker dr. alan krueger. [applause] >> and thank you very much for that kind and detailed introduction. kind of a walk down memory lane for me. i forgot, livingston high school, in the class ahead of me was a jason alexander, who starred in seinfeld among other things. on the class on the other side of me was chris christie, now a governor. i -- when it comes to tennis, i tried to succeed in getting my colleagues to play. it was nice to take tennis bracelet those who work with and do something athletic. i want to begin by commenting on the importance of business economists who work in the policy arena. compared with academic economists, which is the group i know most well, business economists are much more attuned to current developments in the economy and puzzles about economic performance. business economists see the economy of clothes from their companies or industries perspective and there are aware of the distress and limitations of our economi

mr. secretary, thank you very much for being here tonight. one of my favorite tim geithner quotes -" we saved the economy but lost the public doing it."icku i'm wondering whether it's possible to get the public backs. . >> people saw their lives depended by a set of choices mostly they did not make. they saw the world burning around them, a broad run -- the first time in memory that people face a risk of losing their savings or the steps of loss in wealth and employment. then they saw the government forced to act to rescue the people they thought were responsible fairly or unfairly. they were angry, understandably angry and scared and frustrated. i don't think there was any path through this that would have made it easy to do the things we needed to do to solve the crisis and at the same time win at that time broader public support. if you look back at the history of financial crises, the reason governments normally screw up and they normally wait too long to act and the reason why they are some tentative at the beginning is because they sit there and stare at the political

mr. chairman, last week secretary geithner came up to capitol hill to warn of the threat to the american economy of the european debt crisis. mr. chairman, the american people know that the greater threat to the american economy is the american debt crisis. we face the absolute worst debt crisis in america's history, and yet it has been almost three years since both house and senate democrats have submitted a budget. almost three full years. now, to his credit, the president has submitted a budget. to his shame, it adds $11 trillion to our national debt on top of the $5 trillion that he's already imposed of additional national debt. now, mr. chairman, everyone knows that the spending trajectory of the federal government is unsustainable. and what does our president do in his budget? he takes an unsustainable spending trajectory and doubles down. he makes it more unsustainable, which makes it unconscionable, and perhaps worst of all, mr. chairman, even though he knows, he knows what the drivers of our national insolvency are, he refuses to deal with them. but don't take my word for it. lis

mr. secretary, deploying spro is on the table as an option, secretary geithner, secretary sal have said the -- salazar have said the same thing, that you've got it on the table. now, the oil companies and the republicans oppose deploying the sprou but their policy doesn't help drivers right now. none of this oil they're talking about right now is coming online this year, and people are looking for relief at the pump right now. so, mr. secretary, senators bitter, holden, lugar, crapo and thune have introduced legislation that would prevent the person from deploying any oil from the strategic oil preserve until he approves the keystone xl pipeline permit. do you believe, mr. secretary, that the authority of the president should depend on the permitting of the keystone pipeline even if iran cuts off the strait of hormuz and blocks 20% of the world oil supply? >> no, i don't. >> do you believe that it makes any sense to say to our young men and women that we export over into the middle east to protect this supply of oil that we are not going to use the weapon we have here in the united states,

mr. secretary, thank you very much for being here tonight. one of my favorite geithnerrst half of that at the beginning of your remarks tonight but not the second. i'm not looking to draw you back then but, rather to get your thoughts on whether it's possible and if so, how, to get the public back. >> well, remembering that people saw their lives upended by a set of choices mostly they did not make. and they saw the world burning around them. a broad run on the financial system. the first time in memory that people face the risk of losing their savings or this depth of loss in wealth and employment, and then they saw the government forced to act to rescue the people they thought were responsible. fairly or unfairly. and they were angry. understandably angry, and scared and frustrated. and i don't think there was any path through this that would have made it easy to do the things we needed to do to solve the crisis, and at the same time win at that time broad public support. i say this because if you look back at the history of financial crisis, the reasons why governmen

mr. chairman, we had earlier this spring the treasury secretary, timothy geithner, who admitted that -- of the administration that they, quote, don't have a definitive solution to our long-term problem. what we do know is that we don't like yours, unquote. now there's real leadership. the president's health care law, the president's health care law, the current law of the land, cuts medicare by more than $500 billion for more government programs. the president's health care law ends medicare guarantee, ends the medicare guarantee, puts us on this red path over here, mr. chairman, increasing the amount of debt that gives the chairman of the joint chiefs of staff the pause to say that the greatest threat is our debt. the president's health care law empowers the independent payment advisory board to effectively deny care to seniors, you've heard about it. 15 unelected bureaucrats. none of them, none of them can be actively practicing physicians. as a physician i can tell you that gives me great pause. you heard the gentleman from new jersey down here saying that their program, if a doctor say

mr. secretary, thank you very much for being here tonight. one of my favorite geithner quotes is we saved the economy, but we kind of lost the public in doing it. you spoke to the first half of that at the beginning of your remarks tonight but not the second, but i'm not looking to draw you back then, but rather to get your thoughts on whether it's possible, and if so how, to get the public back. >> well, first, you know, just remembering that people saw their lives upended by a set of choices mostly they did not make. and, you know, they saw the world burning around them, you know, a broad run on the financial system the first time in memory people faced the risk of losing their savings or this depth of loss in wealth and employment, and then they saw the government forced to act to rescue the people they thought were responsible, fairly or unfairly. and they were angry, understandably angry and scared and frustrated. and i don't think there was any path through this that would have made it easy to do the things we needed to do to so the crisis -- to solve the crisis a

we had secretary geithner on capitol hill i guess it was last week warning of the perils to the american economy of the european debt crisis. i conceded the point but i said, mrreater threat to the american economy is the american debt crisis and your administration isn't do anything about it. >> thank you. we'll see you again. >> thank you. >> still to come, we're going to examine futures, oil and the dollars. and the legal side effects of the president's health care law. rob andrews and tom price will go head to head. more on "squawk" when we return. >>> time now for today's aflac trivia question. which perfume house did madonna advertise in the late 1990s? isnl enough? huh! no! who's gonna help cover the holes in their plans? aflac! quack! like medical bills they don't pay for? aflac! or help pay the mortgage? quack! or child care? quack! aflaaac! and everyday expenses? huh?! blurlbrlblrlbr!!! [ thlurp! ] aflac! [ male announcer ] help your family stay afloat at aflac.com. plegh! demand media expands on the big board. introducing gold choice. the freedom you can only get from hertz to keep the car you reserved or simply choose another. and it's free. ya kn

mr. hamm we want to thank you very much for your time. we appreciate you joining us today. >> thank you. >> herald hamm is the ceo of continental resources. >> coming up treasury secretary tim geithnerricans not to forget the causes of the financial crisis and "wall street journal" op-ed today he writes my wife looks up from the newspaper with bewilderment at another story about people in the financial world tore their lobbyists complaining about wall street reform. after the break we'll talk to neil roland first on cnbc. [ male announcer ] there's been a lot of talk about the chevy volt lately. how about some facts? the chevy volt was one of the most awarded cars in 2011. the volt's battery has been tested for more than 395,000 hours. ♪ and, most importantly, the volt has received the highest overall vehicle score for safety possible. [ cheers and applause ] the extended-range electric chevy volt. hard to argue with the facts. ♪ on december 21st, polar shifts will reverse the earth's gravitational pull and hurtle us all into space, which would render retirement planning unnecessary. but say the sun rises on december 22nd and you still need to retire, td ameritrade's investment cons

geithner. that's just on the multilateral front, mr. president. president obama also worked closely with congress to pass the comprehensive iran sanctions, accountability and divestment act which strengthened existing u.s. sanctions. he made it harder for the iranian government to buy refined petroleum, to modernize its oil and gas sector, and recently we imposed tough, new sanctions on the central bank of iran. so you had don't have to take nigh word for it. let me quote iran's president ahmadinejad who was the one feeling the pressure. here's what he said last fall. "our banks cannot make international transactions anymore." today, all of these sanctions are beginning to bite. iran is now virtually cut off from large parts of the international financial system. almost $60 billion in energy related projects in iran have been put on hold or discontinued. iran has started to lose oil sales to key customers in europe and asia. all you have to do is look at the front page of today's newspapers and read the stories of iran hastily running around and l