Jack Lew to Urge Asia and Europe to Strengthen Their Economies
Washington - Treasury Secretary Jack Lew, embarking for a global economic summit in Australia with one eye on a slowing global economy and another on a hostile new Congress, plans in an address in Seattle on Wednesday to implore European and Asian leaders to increase demand and get their economies moving.
'The world is counting on the U.S. economy to drive the global recovery,' Mr. Lew will say, according to prepared remarks. 'But the global economy cannot prosper broadly relying on the United States to be the importer of first and last resort, nor can it rely on the United States to grow fast enough to make up for weak growth in major world economies.'
Mr. Lew and President Obama will arrive in Brisbane in a familiar position: Pressing the world to open its spending and fiscal levers while struggling to secure their own economic policies. The president's first summit of the Group of 20 largest industrial economies - in London in 2009 - was dominated by a push for fiscal stimulus and monetary easing.
At that time, the global economy was sliding further into the Great Recession, led by the United States' financial crisis. This year, the United States economy is showing powerful signs of sustained growth, but it faces headwinds from yet another potential recession in Europe and slowing growth in Japan and China.
Mr. Lew will lay out the president's own plan to keep the United States recovery on track, while striking an optimistic tone in the face of a new Republican Congress. Mr. Obama will press for more spending on education, job training, research, manufacturing and infrastructure, will again seek to raise the minimum wage and expand the earned-income tax credit for low-wage workers and secure a comprehensive overhaul of the immigration system, Mr. Lew will say.
For Republicans, the Treasury secretary will nod to conservative priorities and reiterate the administration's pledge to 'modernize our broken business tax system' and to 'shore up our retirement and health care security programs to make sure they meet the obligations of future generations.'
'Even though we are doing much better, more remains to be done, and we are already reaching out to the new Congress to explore areas where we can work together,' he will say, according to excerpts from the speech to be delivered Wednesday afternoon at the World Affairs Council.
But his choicest words will be for Europe and Japan. He will demand 'resolute action' by Europeans fiscal stimulus, looser monetary policy and structural reforms to their economies - 'to reduce the risk that the region could fall into a deeper slump.'
'The world cannot afford a European lost decade,' Mr. Lew plans to say.
He will also jab at the Japanese prime minister, Shinzo Abe, for stepping back from his fiscal stimulus, a clear reference to a consumption tax expected to hit Japanese citizens just when the United States is imploring governments to help expand domestic consumer demand.
And Mr. Lew will urge world leaders not to use currency manipulation to increase exports at the expense of domestic consumption.
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