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Timothy Geithner Says Obama Ready for Fiscal Cliff
On Wednesday, the Treasury Secretary, Timothy Geithner, said that President Barack Obama is ‘absolutely’ willing to go over the fiscal cliff if the Republicans continue to refuse to increase taxes for the highest earners in the country. Geithner made his comments during an interview with CNBC.
“Oh, absolutely,” Geithner said. “Again, there’s no prospect in an agreement that doesn’t involve the rates going up on the top 2 percent of the wealthiest.”
The comments made by Geithner show that Obama is prepared to accept the spending cuts and tax rate increases that occur if a deal is not reached by the deadline set for December 31.
“What we’re trying to do is put in place a comprehensive, balanced set of fiscal reforms that put us back on the path of living within our means and create room for investing to make the economy stronger, make sure we’re protecting Medicare for future generations, and forcing the government to use the taxpayers’ resources more wisely,” Geithner said.
“In that context, you have to have a significant amount of revenues. We don’t see a way of doing it that makes any sense or has any political viability without rates going up as part of that deal,” Geithner said. “Again, the size of the problem in some sense is so large it can’t be solved without rates going up. I think there’s a broad recognition of that reality now.”
On Sunday, Geithner made an appearance on “Meet The Press” on NBC. Geithner said the following, “To– to go over this fiscal cliff, and because Republicans won’t raise taxes, tax rates on the wealthiest two percent of Americans, would subject the average American to big tax increase and enormous damage from the other cuts that would happen in that context.”
Geithner has been working as the negotiator for the White House in the fiscal cliff talks with Congress. Geithner also said that he believes investors and businesses are beginning to warm up to the idea of the tax rates increasing. The reason for the shift in thinking is comments made by executives earlier this week.
One of those businessmen, CEO and Chairman of FedEx, Fred Smith, said that it is ‘mythology’ that tax hikes on the richest in the country would kill jobs.
“I think there’s broad recognition that rates are going to go up as part of a deal,” Geithner said. “I think that’s a welcome change.”
The Republicans presented a proposal of their own on Monday, which was rejected by the White House almost immediately.
“We don’t actually know what the Republicans think they can do in that context yet, because they haven’t told us,” Geithner said about the proposal from House Speaker John Boehner. “We don’t know whose taxes would go up. We don’t know the mixes of rates and limitations and deductions and loopholes that they would support.”