Treasury's O'Neill: U.S. on Edge of 'Golden Age'

Treasury Secretary Paul O'Neill will sit down with Fox News' Neil Cavuto for an exclusive interview Monday at 4 p.m. ET.

WASHINGTON — While other experts worry about a potential economic recession in the U.S., Treasury Secretary Paul O'Neill said Sunday that the country is ``on the edge of a golden age of prosperity'' and described the current economic slowdown as a mere ``adjustment period.''

``I think we're not doing badly for the kind of correction that we're in right now,'' O'Neill said on ABC's ``This Week.''

``It's easy to find gloom and doom, but consumers are hanging in there, their spending rates are still quite good,'' O'Neill said. ``The contraction occurred ... in the investment sector, where we had an overexpansion.''

The Treasury chief said this year's aggressive Federal Reserve interest rate cuts have not yet had their full impact —  but O'Neill said it was not unusual for a six-month lag from the time rates are cut to the impact on the economy. ``We're approaching that now, so I think things are unfolding in a way one would expect from history,'' he said.

The Fed has cut rates five times so far this year and is scheduled to meet on Tuesday and Wednesday. There is wide expectation that rates will be cut again.

The Treasury chief was less optimistic about the future of Social Security. ``We're headed toward a situation where we're going to have a lot more people retired and a lot fewer workers providing payroll taxes, that we've got to do something different,'' he said.

The answer, he said, is the Bush plan to let workers invest some of their Social Security contributions into personal savings accounts.

``It's a big idea,'' O'Neill said. ``It's time for us to make every American into a wealth accumulator, not a creator of an entitlement benefit.''

-- The Associated Press and Reuters contributed to this report.