WASHINGTON – Treasury Secretary Timothy Geithner says the U.S. must cut the annual federal budget deficit, now more than $1 trillion, for the economy to have a sustained recovery and he is not ruling out new taxes.

He said the country needs to understand that the Obama administration will do what’s necessary. He did not detail how the government plans to shrink the deficit, though he said overhauling the health care system and lowering costs are essential.

“When we have recovery established, led by the private sector, then we have to bring these deficits down very dramatically,” he told ABC television’s “This Week” in an interview broadcast Sunday. “And that’s going to require some very hard choices. And we’re going to have to do that in a way that does not add unfairly to the burdens that the average American already faces.”

Geithner also said private economists generally expect to see growth later this year and unemployment to ease in the second half of next year.

Any sustained recovery must rely on business investment and hiring, he said. Geithner said the administration will stick with its economic efforts until a strong private sector-led recovery is in place.