Geithner: White House 'absolutely' ready to go over 'fiscal cliff'
December 5th, 2012
10:06 PM ET
1 year ago

Geithner: White House 'absolutely' ready to go over 'fiscal cliff'

(CNN) - Treasury Secretary Timothy Geithner said Wednesday the Obama White House is prepared for the tax increases and spending cuts ahead in the new year should the negotiations with congressional Republicans not move from the current stalemate.

"Oh, absolutely," he said in an interview with CNBC, when asked if the administration was prepared to go over the cliff.

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"We see there's no prospect to an agreement that doesn't involve those rates going up on the top 2% of the wealthiest" income earners, Geithner said.

Tax rates remain a major sticking point with less than a month to the so-called cliff. Republicans maintain substantial revenue increases can be obtained through reduction of loopholes and credits in the tax codes, while Democrats insist rates on income above $250,000 for a family increase.

In the interview, Geithner reiterated President Barack Obama's point that under his proposal, even earners who pass the threshold "get a tax cut under that framework on the first $250,000 of their income. So in some senses it’s a tax cut for all Americans."

At a post-election news conference, Obama told reporters, "Obviously, we can all imagine a scenario where we go off the fiscal cliff."

"If despite the election, if despite the dangers of going over the fiscal cliff and what that means for our economy, that there's too much stubbornness in Congress that we can't even agree on giving middle-class families a tax cut, then middle-class families are all going to end up having a big tax hike," he said.

He and Boehner spoke by phone Wednesday, although the conversation did not immediately produce any progress towards a deal, a source told CNN. The conversation was their first in a week.

Boehner said at a press conference after meeting with small business owners that his Monday offer to the White House was "reasonable" and "would avert the fiscal cliff with a balanced plan to raise revenues and most importantly to cut spending. It's up to the president to engage in this process, talk to us about where he'd like to go next."


Filed under: Fiscal Cliff • Timothy Geithner
soundoff (27 Responses)
  1. Getoverit

    Yep. My way or the highway...

    December 5, 2012 10:13 pm at 10:13 pm |
  2. Phil

    I truly believe that after the 2014 elections there will not be a single Republican left in office in Congress. This is the feeling of most of my friends as well. We will do everything we can to see to that! Sadly, I am a registered Republican. My party has lost its way!

    December 5, 2012 10:45 pm at 10:45 pm |
  3. Dan5404

    Same stuff from GOP: we'll raise 800-billion in revenues through cutting loopholes. But, just as Romney did, we won't tell you which loopholes (is that because they wouldn't close the favorites of the billionaires, but would close some for the middle class?). The math is not there. It is clear that they would do serious damage to medicare and social security and try to eliminate Obama care, a maddening reality for the GOP. They have to do better, or it's over the cliff.

    December 5, 2012 10:49 pm at 10:49 pm |
  4. plain&simple

    It's funny that the speaker wants to know where the President wants to go next....you haven't been listening the past 2 years... ???? You know exactly where you need to go now let's see how much ability you have to do your elected job and govern your members into not disabling your party from any importance in future decisions! Yes that's how bad it is and only a fool would deny it....

    December 5, 2012 10:51 pm at 10:51 pm |
  5. J.V.Hodgson

    What I see are facts.
    1) Going over the fiscal cliff defeats Republican intentions of no tax rate increase on the rich.
    2) The cliff also brings in the budget act changes of defense spending cuts via sequestration. Republicans tried to repeal but failed.
    3) Democrats could care less about sequestration spending cuts. Dems are $400bn already towards thier sequestration target of $600bn in the Obama / Geithner plan.
    4) All in favor of checks and balances but not a house Republican seat majority ( not plurality of voters majority) legislature Dictating how or what can be put in legislation which is in effect what they have done for the last 4 years and especially the last two. the tax debate was lost in the presidential and any other election less than a month ago.
    5) Grow up ( both sides) and negotiate spending cuts. The ground was laid in the gang of six discussuions which failed over taxes not spending per se. Shall we also remember Bowles Simpson was voted down by Republicans, Now its a solution??
    Flip flop flip flop... actually no the same old our way or the highway!! NB no details from Republicans on the how of spending cuts, because it will be as Ryan and Romney campaigned on... when Boehner fills in the details then its worth Obama sitting down to negotiate.
    Regards,
    Hodgson.

    December 5, 2012 11:02 pm at 11:02 pm |
  6. cthrurlies

    Corporate profits are at a record high, Middle class wages are stagnate. Greedy
    corporations are outsourcing our jobs to foreign sweat shops. The middle class
    built this country, it is time for this country to do something for the middle
    class. Raise the taxes on those making $250,000.00 or more. Leave Social
    Security and Medicare alone. End corporate welfare. What is going to hurt small business and this economy more than anything is when the middle class stop buying.

    It's where we are at.

    December 5, 2012 11:13 pm at 11:13 pm |
  7. Ed1

    Here is an idea.

    Why not you guys started this with your out of control spending and the last Congress and the 2012 Congress was elected to stop the spending.

    We can't spend more than we make without going to jail this might be a good time for you Bozos to act the same way.

    We must make out government accountable for their out of control spending and it's about time to start with a balanced budget for a change.

    Right now every 18 year old has $50,000 of debt that they will have to pay think about it time to stop all the abuse with government giveaways.

    Why should I have to pay for babies that I don't have anything to do with if you don't want a baby get fixed, start birth control, and don't have sex and you not me should have to pay for you abortions and birth control time for you to be held accountable too,

    December 5, 2012 11:22 pm at 11:22 pm |
  8. NameT-hill says

    I think it's clear Where PRESIDENT OBAMA'S taking us the problem is repugs think they can dictate and lead but the election is over Y'all lost the people have spoken we're behind OUR PRESIDENT

    December 5, 2012 11:31 pm at 11:31 pm |
  9. Sylvia Walters

    Let's go over the cliff!!

    December 5, 2012 11:32 pm at 11:32 pm |
  10. Samuel, Virginia

    Its time to pay for the wars an it shouldn't be a responsibility of Social Security to foot the bill. Neither should Americans have to wait until they're "67" before they receive Medicare. Most working class Americans, who need these programs the most, are going to work themselves into the graves before they see a penny from these programs they've paid into since they were 18. We're already over the cliff and have been so for years. United States can either borrow more money from China, or raise rates.

    December 5, 2012 11:32 pm at 11:32 pm |
  11. Disgusted

    Obama's "Fiscal Cliff" check list:
    1. Don't compromise at all insisting on absolutely every item you want
    2. Allow US to fall off "fiscal cliff"
    3. Get the cuts in military spending you want
    4. Get the tax increases on the wealthy that you want
    5. Blame higher taxes that also apply to the poor and middle class and cuts in entitlement programs on the GOP for not compromising on every single item they wanted

    December 5, 2012 11:37 pm at 11:37 pm |
  12. Mike

    Don't let the demos bluff you. The dems got away with a bluff the last time now they think they can do it everytime. GOP, hold the line. The future depends on the GOP holding firm here, the cliff be damned.

    December 5, 2012 11:41 pm at 11:41 pm |
  13. A.C.

    Let's go over the cliff and when the dust settles the going rate to get the tax cuts back it will cost $3 of spending cuts (real ones) for each $1 of tax reductions. You give back 333$B in tax cuts back (which will be very necessary) but you get $1T in spending cuts. Surplus baby.... Worse case and nothing happens we don't add a $1T debt for the first time in 5 years, either way win-win.

    December 5, 2012 11:46 pm at 11:46 pm |
  14. Anonymous

    How about looking at the cause of 47,000,000 on food stamps, 6% of the work force on disability, why the government is paying for 4,000,000 cell phones, how about 47% no paying any federal income tax. Get the politicians to switch to Medicare and social security. Eliminate all the government duplication, inefficiencies, dishonesty, then come ask for more revenue.

    December 6, 2012 12:00 am at 12:00 am |
  15. TEAPARTY MIKE

    Republicans are speaking in the news every day stating the truth, that their plan does indeed increase taxes paid by the rich. Even Obama will not be able to convince voters otherwise by Jan. 1 2013. I think by Jan. 1 a large majority of voters are not going to care much if the rich pay more taxes because of higher rates or a cap on deductions or how many hundreds of billions the tax increase is. I think they will just want both sides to agree on something, anything. In the end I believe most voters will be mad as hell if a deal is not made when both sides have a tax increase on the rich in their plan and they can not come to an agreement. I believe they will be equally mad as hell with Obama as they will be with Republicans. I believe in the end a majority of voters will just say on the tax increase issue to just flip a coin and live with it. In the end I believe they may even hold Obama even more responsible if he will not even sit down and try to work out a deal with Republicans unless they first agree to do it his way. Not even trying to make a deal is the most sure way possible to make sure a deal does not get done. That is not what voters expected of Obama when they gave him a second chance.

    December 6, 2012 12:20 am at 12:20 am |
  16. PTNY

    Well then....lets go over!

    Keep Congress working a little overtime the Holiday season this year to make up for all the crap of the past few years.

    December 6, 2012 12:23 am at 12:23 am |
  17. PeedroPaula

    Boehner said "It's up to the president to engage in this process, talk to us about where he'd like to go next."

    Well, Mr. Boehner, I believe we voters and the President have made it perfectly clear that he – and we – insist on a return to Clinton-era tax rates for the top 2% and corporations as well as lower taxes for the rest of us. I don't see how that could possibly be misunderstood by reasonable people.

    December 6, 2012 12:29 am at 12:29 am |
  18. fernace

    Even though I'm happy that Obama is back in office because he cares for all Americans, I don't agree w/2 points of his proposal! I've given it extensive thought & increasing taxes on families making combined earnings of more than a 1/4 mil isn't right in todays economy! When We, the people said raise taxes on the rich, we meant million/billionaires! Those who make more than 1 mil can afford to pay a few extra percent! Also, no more stimulous, that is a crazy request! It was necessary in '09 when we were in dire need of shoring up the economy so it could continue & it worked, despite the nay sayers, but we're not in such dire straits now & it's not necessary! However, the GOT-Party's proposal is completely unbalanced! $800 bil in "healthcare savings" is just a less obnoxious way of saying they want to cut that much out of Medicare/Aid, which We pay for! If these programs are broke, fix them, don't punish the people who need them! Get to work, that's why we pay you, handsomely, I might add!!

    December 6, 2012 12:40 am at 12:40 am |
  19. Thomas

    Treasury Secretary Timothy Geithner sure looks a lot like Robert Stack as Eliot Ness on the Untouchables ?

    December 6, 2012 02:29 am at 2:29 am |
  20. Thomas

    The man who took down Al Capone , America's best known Republican . Specifically Al Capone was the ultimate symbol of corruption at that time. ..... This meant Capone was convicted of three felony tax evasion counts,

    Eliot Ness Geithner

    December 6, 2012 02:42 am at 2:42 am |
  21. James

    For income earners in the $250k-$350k the tax amount is not so significant that it should be garnering this much attention from both sides. Raise the lower limit of the definition of "rich" to $500k or $1M and up and this becomes a resolution instead of a debate.

    December 6, 2012 02:56 am at 2:56 am |
  22. amf140

    Sure Geithner likes raising our taxes because he doesn't like to pay his own taxes himself. WHAT AN EXAMPLE AND HE IS THE TREASURY SECRETARY.

    December 6, 2012 02:58 am at 2:58 am |
  23. Just a thought

    Yep, Not going call the name of party that would be at fault if we go over the cliff (Re-Dumblicans). Unfortunately the party that won't be named (Re-Dumblicans) only cares about their rich benefactors. These people (Re-Dumblicans) out of sheer spite for the re-elected president want everyone to suffer, even their supporters. These Grover Norquist boot lickers lost at the ballot box last month, but they continue to whine about stuff the american people have already voted against (see last month's election). The president ran for re-election on the notion, RATES FOR THE WEALTHIEST AMERICANS ARE GOING UP.

    December 6, 2012 04:19 am at 4:19 am |
  24. Chris

    I Agree The Rich Need pay Little More Though It should Not Be Distributed down to the poor or middle class. If i were a Republican in Congress Instead Of Taxes The Rich I Would Put Forward A Bill To Increase The Tax Cuts Not For The Rich But For The Middle Class. Leave The rates For The Rich Alone. Just Increase The Cuts For The Lower Half Making 250,000 or less. What Obama Is Saying Everyone Needs To Pay Their Fair Share Is
    so·cial·ism
    \ˈsō-shə-ˌli-zəm\

    1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

    2 a : a system of society or group living in which there is no private property
    b : a system or condition of society in which the means of production are owned and controlled by the state

    3 : a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

    December 6, 2012 05:17 am at 5:17 am |
  25. Marry

    Boehner:"...with a balanced plan to raise revenues and most importantly to cut spending." (Good for the 2% – bad for the economy!)
    Majority of the American people:"...with a balanced plan to most importantly raise revenues and to cut spending." (A little bad for the 2% – but good for the economy!)
    Were you put the "most importantly" is the difference between the GOP and the Democrats!
    The Democrats plan is definitely better!!!

    December 6, 2012 05:39 am at 5:39 am |
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