Yesterday, U.S Treasury Secretary Timothy Geithner testified before the House Budget Committee regarding the President’s Fiscal Year 2011 Budget. Perhaps most significantly, Secretary Geithner testified that the Administration will not put on the federal budget the obligations of the two Government-Sponsored Enterprises (GSEs) operating under conservatorship, Fannie Mae and Freddie Mac, and that, notwithstanding pressure from some quarters, would not be proposing a plan to restructure the GSEs until 2011.

Secretary Geithner highlighted as a first priority for the Fiscal Year 2011 Budget the creation of more and better-paying jobs for Americans and proposed to extend certain business tax relief measures under the American Recovery and Reinvestment Act of 2009 (Recovery Act). He also discussed the Administration’s focus on reforms intended to strengthen the financial system, commenting that while “our financial system is far stronger than it was a year ago ... it is operating under the same rules that led to its near-collapse and a dangerous recession.” Secretary Geithner further noted the Administration’s commitments to civilian research and development, creating clean energy and green jobs and expanding and making permanent the Build America Bonds program, which was part of the Recovery Act. Finally, Secretary Geithner discussed the Administration’s support of the creation of a bipartisan Fiscal Commission that would that would focus on “identifying policies that could win the necessary political support to complete the job of achieving fiscal sustainability.”