December 2nd, 2012
09:00 AM ET
2 years ago

Geithner: No deal 'without rates going up'

Washington (CNN) – Treasury Secretary Timothy Geithner drew a line in the sand over taxes in defense of the Obama administration’s controversial proposal to avoid the fiscal cliff.

In an interview with CNN’s Candy Crowley on "State of the Union," Geithner insisted that any compromise on the plan he presented to congressional Republicans on Thursday, which includes $1.6 trillion dollars in tax revenue, cuts to Medicare, and another $50 billion in stimulus spending, must contain an expiration of the Bush tax cuts for income over $250,000.

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“There's not going to be an agreement without rates going up,” Geithner said in the interview, which aired Sunday. “If they are going to force higher rates on virtually all Americans because they're unwilling to let tax rates go up on 2 percent of Americans, then, I mean that's the choice they're going to have to make."

While he maintains the administration will refuse any deal without the tax hikes, Geithner was optimistic about the negotiations, showing room for compromise as well.

“It's a very good plan and we think it's a good basis for these conversations,” he said. “What we did is put forward a very comprehensive, very carefully designed mix of savings and tax rates to help us put us back on a path to stabilizing our debt, fixing our debt and living within our means.”

The fiscal cliff, which begins in January if Congress and the administration fail to come to an agreement over a number of spending issues, includes automatic reductions in defense and non-defense spending, the end of the payroll tax holiday, and the expiration of extended unemployment benefits. Going over the cliff has the potential to set the U.S. back into another recession.

Republican reaction after Thursday's meeting with Geithner sharply conflicted with the secretary’s assessment of the negotiations and the plan itself. A frustrated House Speaker John Boehner said that “we are nowhere.”

“The day after the election, I said the Republican majority would accept new revenue as part of a balanced approach that includes new spending cuts and reforms,” Boehner said. “Now the White House took three weeks to respond with any kind of proposal, and much to my disappointment, it wasn't a serious one.”

Increased revenues were traditionally scorned by Republicans. Boehner put them on the table by offering to close tax loopholes, reform the tax code and lower rates – a significant move for the leader of House Republicans. He says he will not raise any tax rates and the administration proposing them brought the talks to a “stalemate.”

Geithner disagreed with the speaker’s assessment on the negotiations. He said the administration offered $600 billion in cuts to health care and other mandatory programs combined with the cuts still lingering from last year’s debt ceiling deal (which will result in automatic spending cuts without an agreement by the end of the year) make this “a very substantial packet of reforms."

On the $50 billion in proposed stimulus that includes infrastructure spending, the secretary insisted that it is “something we can afford,” calling it a “modest investment in making this country stronger.”

“I think right now, the best thing to do is for them to come to us and say, look, here's what we think makes sense,” Geithner said. “What we can't do is try to figure out what's going to be good for them. They have to come tell us.”

“I think we're far apart still, but I think we're moving closer together,” he said. “This is something we can do. And I think we're going to get there, because there's too much at stake not to get there, not just for the American economy, but for the world economy.”

The secretary acknowledged the difficulty the Republican-controlled House will have passing this deal, opening the door to concessions on the administration’s part.

“They're in a hard place. And they're having a tough time trying to figure out what they can do, what they can get support from their members for. That's understandable,” Geithner said. “This is very difficult for them, and we might need to give them a little more time to figure out where they go next.”

Reflecting on his time at the Treasury (Geithner plans on leaving the administration sometime after a deal on the fiscal cliff is made), the secretary expressed content and optimism over his four years in office.

“I think we're in a much better position than, actually, I thought was realistic, in those darkest days of this financial crisis, when there was a real risk of catastrophic collapse. And I think all Americans should be much more confident today than at any time in the last four or five, six years,” he said. I'm very proud of being part of that, even with all the challenges we have ahead.”

–Follow Adam Levy on Twitter: @adamplevycnn

Watch State of the Union with Candy Crowley Sundays at 9am ET. For the latest from State of the Union click here.


Filed under: 2012 • Fiscal Cliff • Timothy Geithner • TV-State of the Union
soundoff (218 Responses)
  1. Peace

    Can anyone try to imagine if Romney had won and Dems come and say we want to raise tax on the rich. Republicans could have come with a chorus: "Hands Up"!

    December 2, 2012 12:05 pm at 12:05 pm |
  2. Jim

    Here's some more Geithner double-speak.....(copied and pasted from the article)....

    "On the $50 billion in proposed stimulus that includes infrastructure spending, the secretary insisted that it is “something we can afford,” calling it a “modest investment in making this country stronger.”

    So, Mr. Geithner, with all due respect, I am not a financial analyst, but I also didn't just fall off the turnip truck. So if "$50 bil" in stimulus dollars is "something we can afford", why are you insisting on raising tax rates? If we can afford it....that means we don't NEED extra dollars to pay for it.

    I don't know about YOUR household budget...but mine dictates that if AIN'T GOT THE MONEY IN YOUR ACCOUNT...you can't spend it. A well-managed budget does not require spending BORROWED money.

    Sheesh....and these are the people we put if office to watch out for our money!!!!!

    December 2, 2012 12:05 pm at 12:05 pm |
  3. Allen

    Dear President Obama, America wants you to exert executive privilege to rid our government of repuke trolls. Deny lobbyists power and make America a good place to vote!

    December 2, 2012 12:07 pm at 12:07 pm |
  4. Vence

    Just a reminder: Obama 332 – Romney 206.

    Give'em hell and tax'em Barry!

    December 2, 2012 12:08 pm at 12:08 pm |
  5. CrushTheEnemiesofAmerica

    We won. You lost. All billionaire boot-lickers better get used to the fact that taxes are going up for the top 2 percent. If they don't like it THEY CAN MOVE. I hear Monaco, or maybe Somalia might be to their liking. Bunch of traitors.

    December 2, 2012 12:11 pm at 12:11 pm |
  6. Ricko55

    So how many people think our national debt problem is simply caused by the federal government not spending enough money?

    December 2, 2012 12:12 pm at 12:12 pm |
  7. Billy Blumpkin

    We make 45-50,000 a year in our family and are fed up with Obamas policies. If taxes are to increase, we like many other families may not tolerate it. #we_need_revolution!!

    December 2, 2012 12:12 pm at 12:12 pm |
  8. grace

    How come this article doesn't say what the main point of contention is, which is that President Obama wants to transfer all power of raising future debt ceilings from Congress to himself. This is completely and utterly dishonest that you won't report on what could be catastrophic for this country if it sneaks by the public. I am utterly appalled.

    December 2, 2012 12:13 pm at 12:13 pm |
  9. gajb

    To reduce budget, we should start with an across the board reduction in funds for each and every branch of government. There is simply too much waste everywhere (i.e., conferences to resort areas, flying senators and representatives around the world, hosting extravagant dinners at White House for a chosen few, etc.) Everyone should make some sacrifice, but let's trim the "fluff" before trimming the "essentials."

    December 2, 2012 12:14 pm at 12:14 pm |
  10. tonyd

    So the Repubs offer nothing specific on how to beat the deficit–avoid the cliff. They don't before the election (Ryan: "Can't tell you now.Wait till after the election") Elections over Paul !! Then they get a starting offer from Obama and immediately say "oh –negotiations are over." Again– they offer nothing SPECIFIC– just whine and complain about Obama's "insulting" offer. But offer nothing.. This all shows Republicans for what they really are now–and for the last thirty years. HOw bout on December 31st Obama goes on the air. they Put an empty chair across from Obama..primetime.. Use the one Clint used at the convention...... Have Obama sit in the other chair and negotiate with the invisible Boehner/ Ask the chair for SPECIFICS on how Republicans can deal with this all better then the Dems.You will get more answers out of that empty chair then you will from boehner and the Republicans And really, that has been the Repub. scam since Reagan... cut revenue..but never really honestly tell the voters what it will mean to them and their needed programs.
    And you want to blame the Dems/Obama for going over the cliff.? Specifics Boehner– Ryan–McConnell. Let us know a specific plan.Not just "cut deductions..loopholes..kill social security medicaire and medicaid too". they will not talk specifics..Because then they will lose even those voters who have been scammed by them since Reagan. Well–caue of the fiscal cliff, their time is up. They will not offer anything specific... ever..Cause all they really want to do is kill those three programs.. And they know if they are forced to admit that, even you fox heads would dump them forever.

    December 2, 2012 12:15 pm at 12:15 pm |
  11. amused101

    republicans,aka, religious zealots, these are small businessman and ceo's who go to church on sunday and ask of forgive of theirs then start in again on Monday to sin for another 6 days, vast majority of small businessmen are thieves who want to steal more

    December 2, 2012 12:15 pm at 12:15 pm |
  12. massoud

    Tim Turbo Tax Cheat Guetner says his plan also includes a $ 50 Billion Dollar stimulus package, apparently it's time to payoff Obamas Campaign donors again with Tax Payers money

    December 2, 2012 12:15 pm at 12:15 pm |
  13. Billy Blumpkin

    Stimulus is what got us into this mess to begin with. The debt will NOT be paid by the middle class because most of us refuse to pay for it. Obamacare needs to go and so does the stimulus that we don't need.

    December 2, 2012 12:16 pm at 12:16 pm |
  14. Dywlf

    Lets go off the cliff, the parasites can't agree on who going to pay, its what the electorate voted for. If I lose my job I'll just get food stamps, rent assitance, medicaid, and all the other perks. I don't know whos going to pay for it or even care. I love it.

    December 2, 2012 12:16 pm at 12:16 pm |
  15. chaing

    Keep in mind that this so called 'tax hike' on the rich is really a re-setting to where it should've been. A gift I beleive from GWB. The tax break for the people was meant to be temporary. In either case, there has been no talk from either party about cutting thier 'benefits' such as thier huge retirement guarentee,superior medical benefits, and other monetary bonuses for life. All that for doing nothing these last year and it appears its continuing!

    December 2, 2012 12:20 pm at 12:20 pm |
  16. Fred

    A reminder that even the tax cuts for the middle class and poor were the Bush tax cuts. To be honest, I think the democrats wouldn't mind going over the fiscal cliff and seeing all tax rates increase, especially because they will blame republicans for that happening. They feel like they're in a win-win situation right now.

    December 2, 2012 12:21 pm at 12:21 pm |
  17. larry5

    When Geithner speaks you can hardly see Obama's lips move.

    December 2, 2012 12:22 pm at 12:22 pm |
  18. George

    Tell the repulicains they will be kick out and loose there job if they don't come together in all this. These Repulicans are whats holding this country hostage

    December 2, 2012 12:22 pm at 12:22 pm |
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