Treasury Secretary Timothy Geithner joined other Obama administration officials on Thursday who fanned out across the country to talk up prospects for brighter hiring prospects as recovery sets in.

The economy is beginning to heal, Geithner said after meeting a group of local businessmen and politicians at a Honeywell International plant here.

We have made a lot of progress over the last year in breaking the back of one of the worst recessions in generations, he said, adding the momentum of job loss was easing.

A day after President Barack Obama in his State of the Union address made jobs his top priority, Geithner said the administration wants to work with Congress to put in place a job creation program that would offer tax incentives for hiring and tax cuts for clean energy investments, among other measures.

He said the Obama administration's budget to be announced next week will contain a $5 billion expansion of a tax credit for companies that make products that power a clean energy economy. Honeywell makes a variety of products that aim to cut energy consumption, including programmable thermostats.

An economic recovery, albeit a slow one, has set in from the severe recession that hit in late 2007 and was followed by the financial crisis in 2008, and administration officials are looking for a little more credit for it.

Geithner, who played a pivotal role in helping shape the rescue of the financial sector, said the stability that has been restored to the sector will be vital in getting the economy and job creation back on track.

If you don't have a financial system that's working, nothing else is possible, he said after touring the Honeywell plant where he chatted with assembly-line workers and was given a tour by company executives.

At a brief question-and-answer session afterward, he was asked whether it was a respite for him to be in chilly Minnesota after the grilling that he received on Wednesday before a House panel on how bailed-out insurer American International Group withheld details of $62 billion it paid to banks.

Lawmakers questioned him sharply about what he knew about AIG's handling of payments to banks to settle swaps contracts. Geithner held his ground at the hearing, repeating that the $180 billion government-funded rescue was necessary to avert broader economic damage.

He turned aside a question on Thursday that implied lawmakers' hostile tone implied they lacked confidence in his handling of economic issues.

Yesterday was part of the privilege of office, he said. In crises, you do the hard and necessary things that are unpopular.

(Editing by Leslie Adler)

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