Geithner: Deficit reduction has to wait

WASHINGTON (CNN) -- Economic growth and job creation remain the government's top priority, despite a federal deficit that is "too high," Treasury Secretary Timothy Geithner said in an interview broadcast Sunday.

Geithner called the latest report of economic growth in the third quarter "good news," but in the interview taped Saturday with the NBC program "Meet the Press," he stopped short of declaring the recession over.

The Obama administration's two "central imperatives" were restoring sustainable economic growth and creating jobs, Geithner said. Lowering the deficit could then occur as the economy recovers fully, he said.(Administration says stimulus has created 640,000 jobs)

The deficit will "have to come down; it's too high," Geithner said.

Asked how to balance the deficit, Geithner acknowledged that the government faces "hard choices" but wasn't ready to decide on raising taxes. He reaffirmed President Obama's campaign pledge against increasing the tax burden on those making less than $250,000 a year.

"We're going to have to bring our resources and our expenditures more in balance," he said, adding that economic growth is a pre-condition for job creation and eventual budget balancing. "Right now we're focused on getting growth back on track."

Geithner cited the need to open more credit for small businesses, warning that financial institutions accused previously of taking on too much risk now may be too cautious.

"The big risk we face now is that banks are going to overcorrect and not take enough risk," he said.

Asked about unemployment, Geithner said the situation would continue to worsen before it gets better. He said economic growth was the necessary pre-condition for job creation that would reverse the continuing increase in jobless numbers.

Geithner also said it was too soon to know if a second economic stimulus package was needed, but he supported plans before Congress to extend unemployment benefits and the homebuyers' tax credit that originated under the previous stimulus package.

The economic discussion allowed Geithner to advocate health care reform legislation before Congress, saying deficit reduction was dependent on bringing down health care costs.

"The best way to add to a long-term deficit and add to the burden is not reforming health care today," Geithner said.