WASHINGTON — Treasury Secretary Tim Geithner appeared to contradict himself on counting war savings as deficit reduction in an appearance on Fox News Sunday.
Geithner repeatedly maintained that the administration had made significant spending cuts by ending the war in Iraq and drawing down troops in Afghanistan, drawing skepticism from host Chris Wallace who called it a “budget gimmick.”
Geithner said it represented real spending cuts. “If those wars had gone on, it would have been spent,” he said.
But he didn’t always feel that way.
In his book on Obama’s first term, “The Price of Politics,” Bob Woodward reported that Geithner neer thought war savings counted, but insisted they be included in the final deficit reduction total to keep the bond rating agencies and the markets happy.
“Geithner said that the savings from winding down the wars in Iraq and Afghanistan – the overseas Contingency Operations fund – should be counted in the grand total,” Woodward reported. “He conceded that this wasn’t real savings, but it was a peace dividend and it made the overall total look bigger. ‘We need to have this because the ratings agencies and markets believe in this stuff.’”
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