Geithner: We're Ready to Go Over Cliff if Taxes Don't Rise
Wednesday, 05 Dec 2012 06:17 PM
The Obama administration is ready to go over the fiscal cliff if
it doesn't get its way when it comes to raising taxes on
wealthier Americans, said Treasury Secretary Timothy Geithner.
Congressional Republicans and the White House are scrambling to prevent a series of tax breaks from expiring at the end of the year right when automatic cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could send the country into recession next year if left unchecked by policymakers.
Taxes serve as a sticking point, with Democrats arguing tax breaks should expire for the wealthy while Republicans are countering with plans to extend tax cuts for everyone but to raise revenue by capping deductions.
No deal, Geithner told CNBC.
When asked if the administration was ready to go over the cliff if Republicans continue to oppose White House plans to hike taxes on the richest 2 percent of Americans, Geithner was quick to respond.
"Absolutely," he told the network.
"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," Geithner said.
"There's no prospect in an agreement that doesn't involve the rates going up on the top 2 percent of the wealthiest."
Republicans have proposed capping deductions and doing away with tax write-offs to drum up $800 billion in fresh government revenues to help narrow deficits, though Geithner insists any such plans must come hand in hand with tax hikes on households taking in $250,000 a year.
"They acknowledged they were prepared to do $800 billion in higher taxes on part of the American economy. That's part of the balanced framework. That's definitely progress," Geithner said.
"What we need to see is have them acknowledge that they are prepared to see rates go up. And if they are willing to accept that, and commit to that as part of an agreement, then we think we can do something really good for the American economy."
The White House, meanwhile, is crafting a Plan B in case the country does go over the cliff and spending cuts agreed upon during the 2011 debt ceiling resolution kick in early 2013, with the White House's Office of Management and Budget reaching out to federal agencies for their plans to react in case spending cuts kick in, known technically as sequestration.
"The administration remains focused on reaching agreement, as we've been discussing, on a balanced deficit-reduction plan that avoids sequestration" said White House Press Secretary Jay Carney, according to the Yahoo! News.
"This action should not be read … as a change in the administration's commitment to reach an agreement and avoid sequestration."
Congressional Republicans and the White House are scrambling to prevent a series of tax breaks from expiring at the end of the year right when automatic cuts to government spending are scheduled to kick in, a combination known as a fiscal cliff that could send the country into recession next year if left unchecked by policymakers.
Taxes serve as a sticking point, with Democrats arguing tax breaks should expire for the wealthy while Republicans are countering with plans to extend tax cuts for everyone but to raise revenue by capping deductions.
No deal, Geithner told CNBC.
When asked if the administration was ready to go over the cliff if Republicans continue to oppose White House plans to hike taxes on the richest 2 percent of Americans, Geithner was quick to respond.
"Absolutely," he told the network.
"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," Geithner said.
"There's no prospect in an agreement that doesn't involve the rates going up on the top 2 percent of the wealthiest."
Republicans have proposed capping deductions and doing away with tax write-offs to drum up $800 billion in fresh government revenues to help narrow deficits, though Geithner insists any such plans must come hand in hand with tax hikes on households taking in $250,000 a year.
"They acknowledged they were prepared to do $800 billion in higher taxes on part of the American economy. That's part of the balanced framework. That's definitely progress," Geithner said.
"What we need to see is have them acknowledge that they are prepared to see rates go up. And if they are willing to accept that, and commit to that as part of an agreement, then we think we can do something really good for the American economy."
The White House, meanwhile, is crafting a Plan B in case the country does go over the cliff and spending cuts agreed upon during the 2011 debt ceiling resolution kick in early 2013, with the White House's Office of Management and Budget reaching out to federal agencies for their plans to react in case spending cuts kick in, known technically as sequestration.
"The administration remains focused on reaching agreement, as we've been discussing, on a balanced deficit-reduction plan that avoids sequestration" said White House Press Secretary Jay Carney, according to the Yahoo! News.
"This action should not be read … as a change in the administration's commitment to reach an agreement and avoid sequestration."
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