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. Anonymous

    OK, Republicans. Enough of the whining and complaining. Obama has offered his plan ... what is your realistic counter offer? All the wailing and gnashing of teeth isn't impressing anyone ... especially the majority of voters who voted for Obama ... many of whom live in areas which can and will vote out any more obstruction coming from the right.

    December 2, 2012 09:11 am at 9:11 am |
  2. Gurgyl

    Tim, stick to your word. Tell Obama the same. Let people involve. Stop SS to all the Foreigners that became USA citizens who did not contribute a dime into our SS and Medicare. These India dudes are #1 on this CHEATNG. Please stop this nonsense. Put strict immigration rules in place. God bless.

    December 2, 2012 09:13 am at 9:13 am |
  3. dreamer96

    Given a choice between the cliff...or slope...and giving into to the GOP demands ...go for the cliff.....Get Bush's tax cuts out of there...We have had 30 years of Reagan financial policy from the GOP ... and it has only helped the rich get richer...hurt the average working man and woman...Throw out the Reagan gudie to a financial utopia, it only helps the top 1%.....Clinton raised taxes and we created more jobs, and had a better economy that lasted longer by raising the taxes....and improving the lives of the average American..so they could afford to go out and buy things...

    December 2, 2012 09:14 am at 9:14 am |
  4. Wire Palladin, S.F.

    It is time to return to the fiscal responsibility of the Clinton years. The GOP is willing to sacrifice our country for the unnecessary tax cuts for the wealthy. The right wingnuts who get their talking points from Fox foreign owned media have to wake up and realize that 10% of that foreign ownership is Saudi.

    December 2, 2012 09:14 am at 9:14 am |
  5. ultralance12

    Sounds reasonable to me. "This is what we want, now you tell us what you want". The Republican congressmen might not like it as it forces them to put a counter proposal forward that will be much less popular but that is how negotiations work. I think Tom Cole is right and they should just pass the tax cuts from the middle class. The rates are going to go up on the wealthy anyway so you might as well remove the appearance of "holding hostage middle class cuts to protect the wealthy".

    December 2, 2012 09:17 am at 9:17 am |
  6. Asturiano

    Where is the Republican plan? Why are they secretive? Where is their tax reform? What deductions do they want to eliminate? Are Republicans afraid of telling the people what they want to do?

    December 2, 2012 09:18 am at 9:18 am |
  7. Sagebrush Shorty

    The Treasury Secretary has no business drawing a line in the sand. Another example of the dictatorial mindset of this administration. Let Obama draw his own lines and live with the consequences.

    December 2, 2012 09:19 am at 9:19 am |
  8. lxs

    well, that's why we have sand. So the politicians can do an "Etch-a-Sketch".

    December 2, 2012 09:20 am at 9:20 am |
  9. dtboy

    So, basically he's saying that unless we single out and discriminate against our rich, American brethren, then there's no deal?

    December 2, 2012 09:20 am at 9:20 am |
  10. Floyd from Illinois

    Boehner reminds me of the high school princess who went to the prom with the hottest guy in school, who gave her a 500 dollar corsage, got the 5000 dollar dress from her parents, ate at the fanciest place in town, won the queen tiara, and then whined and moaned that the evening was ruined because she didn't get the limousine.

    December 2, 2012 09:20 am at 9:20 am |
  11. vlad from massachussetts

    Any cuts in the Congress health care and lifetime benefits? No? Only Medicare for "ordinary" people?

    December 2, 2012 09:23 am at 9:23 am |
  12. texasnotea

    Tax rates are going to go up on the wealthy. The President ran on this and was elected to do this so the 'pubs need to get on with it and stop trying to pretend they have the negotiating high ground.

    December 2, 2012 09:27 am at 9:27 am |
  13. ib1sage

    Let the cliff come and the American people will withstand it. Then vote all the Tea Party out of congress, all those who signed Grover's pledge, and then we can move on to developing a fiscally strong tax code and budget.
    Time to play Hardball!

    December 2, 2012 09:28 am at 9:28 am |
  14. humanbean

    Boehner is so busy trying to hold onto his position as Speaker of the House that he could care less about whether this nation fails or not. Shows where his loyalties lie and it's not with the American people. Way back when, there was a guy named Thomas "Tip" O'neill, who would have put his career on the line in order to negotiate a deal that represents everybody. He put his reputation on the line many times. He was a true Speaker of the House that represented his position well in representing everyone. Boehner is no Tip O'neill, and is certainly not representative of a real true Speaker. He's only a Speaker of the Republican Party. The party of NO.

    December 2, 2012 09:30 am at 9:30 am |
  15. Gabbo

    Of course, Geithner doesn't include himself on "that other side of the line with the taxpaying public" now, does he ?

    December 2, 2012 09:33 am at 9:33 am |
  16. Gabbo

    I'll pay more taxes, but ONLY if spending comes down by a far larger amount. ONLY.

    December 2, 2012 09:33 am at 9:33 am |
  17. Mike

    But no serious discussion from the administration on spending reform. Spending is the problem, not taxes. The amount of additional tax revenue being discussed doesn't even come close to solving the problem.

    Why is all of the discussion about hammering the rich with higher taxes? Isn't the problem, and won't solve the problem. The administration and democrats in congress are not serious about solving this problem – I won't be convinced otherwise until the start talking about serious reform in spending.

    More class warfare and kicking the can down the road.

    December 2, 2012 09:36 am at 9:36 am |
  18. jkk

    Interesting demand from a tax evader. Love how people who do not or refuse to pay taxes make so many demands on the ones who do.

    December 2, 2012 09:37 am at 9:37 am |
  19. Paul Cooper

    Earth to Mr. Geithner: You have no say in the matter. You have no control over what is done. You are not an elected official with a vote; you are a tax cheat elevated well above your station. Sit down and shut up. If Mr. Obama wants to make threats, he can do so. Your job is to do as you are told.

    December 2, 2012 09:37 am at 9:37 am |
  20. Republicans Are The American Taliban

    Where is Paul Ryan....their "numbers guy" with their counter offer?

    December 2, 2012 09:38 am at 9:38 am |
  21. Mopery

    Republicans just don't get it. They're living in an echo chamber full of delusions, the same delusions that made them predict a landslide victory for Romney. When taxes go up on everyone and sequestration goes into effect, the American people will not blame the Democrats, because they know it is the Republican's fault. The GOP are obstructionists who have refused to compromise on any bill the Obama administration has put forward in the last two years. Boehner and his ilk are nothing more than toddler having a tantrum when they don't get their way, it's clear for all to see, and they'll pay for it in 2014. Keep up the angry fits GOP, they are the death knell of your party.

    December 2, 2012 09:39 am at 9:39 am |
  22. Buck

    Why can't all of you just get along. You polititicians put us in this mess. Why can't you work out something that good for the American people and not just what is good for your party. What we need is tax reform where everyone pays their fair share and do what ever it takes to create more tax paying jobs. WAKE UP.

    December 2, 2012 09:40 am at 9:40 am |
  23. Name

    taxes should not go up on the wealthy.

    December 2, 2012 09:41 am at 9:41 am |
  24. Darryl

    Tax rates are going to go UP for the top 2% and thats the way it's going to be. Republicas better get use to it. Wallstreet lost, republicans lost and it's time they pay their fair share.

    December 2, 2012 09:41 am at 9:41 am |
  25. trex

    ......Hey, look at it this way..............about 70% of voters WANT TAX INCREASES ON THE VERY WEALTHY...................and SMART CUTS to spending......................................Naturally, today's gop is AGAINST THIS................................and if the gop allows us to "GO OVER THE CLIFF".............the gop will NEVER EVER EVER EVER EVER win a national election...................................NOT EVER,.....NEVER................

    December 2, 2012 09:43 am at 9:43 am |
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