"Geithner: We Will Go Off The Fiscal Cliff If Republicans Insist On Extending Tax Cuts For The Rich"
Treasury Secretary Timothy Geithner said that Republicans will be to blame if Congress can’t pass a balanced plan to avert the so-called fiscal cliff and insisted that President Obama would not sign a proposal that extends President Bush’s tax cuts for the richest 2 percent of Americans.
Asked, during an appearance on Fox News Sunday, if the country would avert the mix of automatic spending cuts and tax increases that are scheduled to go into effect next year, Geithner insisted that it could, but only if Republicans allowed lower taxes on the wealthiest to expire:
CHRIS WALLACE (HOST): Last question, can you promise that we will not go over the cliff?
GEITHNER: No, I can’t promise that. That is a decision that lies in the hands of the Republicans, that are now opposing increases in tax rates, if they recognize the reality, that we cannot afford to extend the tax rates we have the basis for an agreement that would be good for the American people.
WALLACE: And the President bears no responsibility, it is all up to the Republicans?
GEITHNER: Chris, ask yourself this question, why does it make sense for the country to force tax increases on all Americans, because a small group of Republicans want to extend tax rates for 2% of Americans — why does that make any sense? There is no reason why it should happen, we can’t afford the tax rates, that is like the deep tragic lesson of the last decade, we and not afford them and will not get through it, to the end now, without a recognition of the Republicans to that basic reality and that will be the responsible thing to do and my judgment is, they are going to do it because there is no alternative to that.
The Treasury Secretary also laid out the administration’s proposal for averting the cliff, stressing that the mix of increased revenue and entitlement cuts are grounded in proposals the administration included in the President’s FY 2013 budget and offered during the 2011 budget negotiations.
Alongside the $1.6 trillion in tax increases and $80 billion in investments that Obama is offering, he is also agreeing to $600 billion in “reforms and savings, to our health care and other government programs.” The reductions, Geithner said, are on top of “the trillion dollars in spending cuts we agreed with republicans, last year, on defense and a range of other government programs.”
Republicans have demagogued the proposal. They oppose raising marginal tax rates, but are open to increasing revenue by closing loopholes and deductions, so long as those reforms are tied to unspecified “structural” changes to Medicare and Medicaid.