U.S. needs to step up on global economic issues, Treasury chiefs say

April 27, 2015

photo of Treasury chiefs with Sheryl SandbergThree former U.S. Treasury secretaries took the stage at the Milken Institute Global Conference to sound the alarm on the need to address critical economic challenges — and beseech Congress to relearn how to compromise.

Speaking on a panel about the global economic outlook, Robert Rubin, Henry Paulson and Timothy Geithner all lamented the slow pace of growth during the recovery since the Great Recession. But they told moderator Sheryl Sandberg, chief operating officer of Facebook, that the U.S. was performing better than most of its major competitors.

The U.S. still is "by far the strongest, biggest economy in the world," said Paulson, who was Treasury chief under George W. Bush and now chairs the Paulson Institute.

But staying in the lead will require Washington to make serious headway on issues that are holding us back, Paulson added, including the tax system, immigration policy and the growth of entitlements. "The world is changing faster than our policies are changing."

Although blaming Congress might seem an easy default for a Treasury secretary, the true power to change the economy in the long term "runs through Congress," said Geithner, who guided the department for Barack Obama during and after the bust.

Rubin, Treasury chief under Bill Clinton, sounded downbeat on the question of Congress coming to grips with the costs of an aging society. "There isn't a will right now for entitlement reform," he said. Though he admitted he wasn't a user of social media, he wondered whether it could be used to engage more Americans in constructive debate on key issues.

On the hot-button issue of income inequality, the three couldn't agree on the approach government should take to boost people at the bottom. Paulson, however, said training young people for the jobs of the future is a key piece of the puzzle.

The income-inequality question sparked a humorous exchange between him and Geithner. Paulson volunteered, "I was working on it while at Goldman Sachs." Interjected Geithner: "In which direction?"

Asked about the gender gap, Paulson was direct in how to address it and get more women into senior corporate positions. "It takes a lot of push from the top down. I don't believe in quotas, but the CEO ... has to put a finger on the scale."

Sandberg asked the panelists whether political stalemate in Washington threatened to undermine U.S. economic primacy. And playing devil's advocate, she asked, "Does it matter?"

Rubin said the world was waiting for the U.S. to take the lead again on global trade and other economic issues. "I think the world needs America to be America again." He and Paulson agreed that it was crucial for the U.S to see China as an economic partner, not an adversary. Indeed, the U.S. and China working together is "probably the best chance the world has” to solve global challenges, Rubin said.

At the end of the session, Sandberg sparked hilarious banter among the three in her "lightning-round" questioning, which included, "What's your newest piece of technology?"

Rubin's response: "A ball-point pen."