December 2nd, 2012
09:00 AM ET
9 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. ondeck

    GOP will pay for this if they run our economic recovery into the ground again. I am so freakin sick of these people putting their party and personal interests ahead of the american people – you are there to do the work for the citizens of this country – Do IT or get the hell out.

    December 2, 2012 09:44 am at 9:44 am |
  2. Steve Ratcliffe

    The nly way out of this mess is through the storm. Pain. Got it? Both DEMS & GOP are selling the American people snake oil. Want a real fix? Time to go over the cliff and force real spending cuts, entitlement reform, and tax hikes for the real rich (+$1million).

    December 2, 2012 09:44 am at 9:44 am |
  3. Mike S

    If we want the Clinton tax rates can we have the whole budget too? Meaning cutting everything and spending less? I'm okay with higher taxes as long as the spending gets cut too (to include the holy of holies of defense). Please excuse any spelling errors. I'm typing from my phone.

    December 2, 2012 09:44 am at 9:44 am |
  4. Alan

    Love this guy...maybe a presidential run in 2016.....

    December 2, 2012 09:45 am at 9:45 am |
  5. rplat

    Let it crash to the bottom of the "Cliff" . . . enough of these money sucking socialists and their attempts to take from the productive members of society and give it to the social parasites. This is the line that must be drawn and not Obama's laughable deal.

    December 2, 2012 09:45 am at 9:45 am |
  6. jd

    How much time is congress going to spend in session in 2013===126 days. They should be sequestered, forced to live in cheap motels until this fiscal clift is resolved. Frankly senators and congress should forego their "pay" as representation should be considered a civil duty and done without compensation, besides most of them are multi-millionaires anyway.

    December 2, 2012 09:47 am at 9:47 am |
  7. annieL

    What is the "$600 billion in cuts to health care" in Obama's proposal?That's not pocket change. Why do those keep getting glossed over? Is it the reduction in Medicare payments to doctors? Or does it cut coverage, increase deductibles and co-pays, decrease eligibility, what? Do you news people think that is not worth explaining to people who need medical care?

    December 2, 2012 09:47 am at 9:47 am |
  8. Anonymous

    "Corporate America has gone too far with their lobbying to get such crazy loopholes put into law and companies such as GE are not paying any taxes and even getting tax credits! How ludacrous is that?"

    Read the comments coming from the our red state residents; you know, all the FOX News, Limbaugh faithful that come to CNN to share their stupidity. It's all about their hatred for Obama. So, supporting the very rich is just fine by them. Some would even call them programed. Most would agree. They are programmed ... by a bunch of bloviating TV and talk radio mega millionaires.

    December 2, 2012 09:48 am at 9:48 am |
  9. Sundara0000

    Are you guys really serious right now? Are you not listening to the same stuff I am? I am all for tax hikes on the wealthy. I find Obama saying lets get these taxes done Congress for th good of the American people, while also saying we will worry about the spending later...UNACCEPTABLE. What in the world is wrong with the American people today.

    December 2, 2012 09:48 am at 9:48 am |
  10. atc333

    The GOP fails to comprehend the way to balance the budget is to first put the nation back to work, investing in infrastructure, education, new industry, manufacturing,, energy research and development, or in other words, instead of investing in gifting wealth to the top 2%, which as a national tax policy, has failed miserably.

    Where were the jobs created by Reagan, Bush 1, and Bush II? Strangely enough, less than half as many as created by the Democrats. Why did we see almost 10 Trillion in deficits, as we watched huge amounts of wealth redistributed to the top 2%, so much that they now own over 44% of all the wealth of America?

    Yet once again, we see the GOP fighting to preserve tax cuts for the non performing job creators, who for 20 plus years have seen low rates, massive wealth accumulations, all financed by Federal Deficits, which, after all these years of gifting to their most favored citizens, the GOP still does not want to let that same group begin reimbursing the nation and begin paying it back.

    Consider tax rates for the top 2% back in the 50s and 60s. Compare them with today. Consider our history of deficit creation. Consider the tax rates as the deficits increased, and why.

    Boehner and the GOP are wrong.

    December 2, 2012 09:48 am at 9:48 am |
  11. realistic

    Ok let's attack the wealthy let's get those people who worked deligently through high school, who struggled through college, who risked it all to start a business how dare they be successful. Let's take 40 percent of what they make they don't deserve it. Let's take all they have and pay the government debt for the next ten days. Then we will reconvene for the next plan.

    December 2, 2012 09:49 am at 9:49 am |
  12. Jeanneboo

    If "everyone" has to give up something for the cause, why doesn't Congress include itself. They have pension and medical insurance that most of the rest of us can only dream about. They don't have to be there long before the golden parachute kicks in. Their retirement package is better than most of our full time employment pay. The cut back should begin with them to show their resolve.

    December 2, 2012 09:50 am at 9:50 am |
  13. BillWinWestOhio

    There is a whole class of people who have become dependent on the government for housing, food stamps, and other freebies. Unfortunately these programs have allowed these people not to grow up, and now they are in for a rude awakening when their benefits are taken away and they have to face reality the way the rest of us do. For some it will be a good experience and will help them grow as a person. But for others, they will refuse to swim and will sink instead. To them I say, good riddance. They have been dragging our country down long enough already.

    December 2, 2012 09:50 am at 9:50 am |
  14. Joe M.

    Obama's initial plan is the equivalent of the Republicans putting Paul Ryan's plan for tax rates and entitlements on the table and saying "This is our proposal". If the GOP did that, liberals' heads would have exploded. How this isn't the equivalent from Democrats, I don't know.

    December 2, 2012 09:53 am at 9:53 am |
  15. Larry

    Nothing is going to happen except a fall off the cliff – that's the good news. The bad news is we will still have republicans in congress. Let the Bush tax cuts expire, let the Pentagon take a big hit along with entitlements. The poor will still be poor, the middle will still be the middle, and the rich will finally get their tax increase.

    December 2, 2012 09:56 am at 9:56 am |
  16. Pete

    Geithner,you can lead a horse to water but you can't make him drink..That's what you have with republicans in ignorence originally getting a 10 -1 cuts to raising revenues and these same republicans turning that down,enough is enough..It's now in your court with either Pres.Obamas way as yours or let the Bush tax extensions go with the republicans and simply restructure rates just for the lower 98%.Then see if republicans try to rail against that because it would be political suicide and they know it..Republicans approval ratings are at rock bottom now and midterms can't come fast enough to show them who really is boss,certainly not these so called conservative nitwits..So to all republicans out there,tell your reps to work with these democratic reps or face your demise at midterms..The choice is yours, work for America or work somewhere else,not in Washington DC I can assure you!!

    December 2, 2012 09:57 am at 9:57 am |
  17. omeany

    Big business has had record profits in the last decade yet they keep their employees wages and benefits stagnant. This greed is killing the poor and middle class and destroying America. They should be made to pay more. Especially those who contributed to this debacle.

    I hope they can find a way to take some of that extra revenue and see us rank and file folks get descent wages and benefits. Capitalism only works when it works fairly otherwise it is simply the rich oppressing the poor and we just had an election that lets our elected officials know loud and clear the majority of Americans want a fair America.

    December 2, 2012 09:57 am at 9:57 am |
  18. bigdoglv

    All this hate and division for 8 1/2 days of funding for our spend happy Congress. Sad indeed.

    December 2, 2012 09:57 am at 9:57 am |
  19. Walter

    Oh those laughable libs. They scream and squawk about inflexible Republicans, and then you have Chuckles "The Clown" Schumer and Harry "The Cadaver" Reid saying that if cutting entitlements are included they'll be right up front as we go over the "cliff." This past week, the ridiculousness of the libs was front and center when the proposal presented by Obama Claus and Little Timmy Geithner included such cuts as increased stimulus spending elimination of the debt ceiling (so the libs can spend to their hearts content). The libs are completely delusional, but it's to be expected.

    December 2, 2012 09:57 am at 9:57 am |
  20. polnick

    Rent subsidies to the poor and the providing of shelters to the homeless cost taxpayers over 356 billion annually. In these times where the government is short of funds cutting costs is necessary. Having the poor and homeless double bunk will save 225 billion, and end the nightly isolation of those we have left behind.

    December 2, 2012 09:57 am at 9:57 am |
  21. penguin

    The "fiscal cliff" is a mix of tax increases and spending cuts. We avert this so called "cliff" by instituting a different set of tax increases and spending cuts. We get to choose which "cliff" we go over!!!!

    December 2, 2012 09:58 am at 9:58 am |
  22. Vachon

    What most people never seem to realize is that if and when we fall off the cliff everything but the gov pay is going to be cut. So how about this, they live on min wage for a month without access to their other funds and only min wage at their new tax rate and see how they like it.

    December 2, 2012 09:58 am at 9:58 am |
  23. T-Pain

    Let the tax cuts expire for everyone. Let sequesteration run its course. There will be an initial hit, people will complain, chicken littles will run around screaming the sky is falling and then the country will be better off for it a decade from now. If we want a strong and vast safety net everyone chips in and we can have it. It's fun and all to scream that the rich need to pay but it is not productive. It just feels good to stick it to people with more money than you. But maybe that's the new america: Someone else needs to pay for this.

    December 2, 2012 09:58 am at 9:58 am |
  24. Bob MacKay

    Republicans have been exposed now. The people realize, Republicans are only trying to make the wealthy even wealthier, while crushing the middle class and the poor even more. It is time to go after all Republicans, and take them out of office and out of Washington. Republicans are opposed to the interests of the majority of us.

    December 2, 2012 09:59 am at 9:59 am |
  25. JR

    Go over what some describe as "the cliff' which it is not. Then in January have a vote to implement the current tax rates for the lower and middle class. The GOP unless totally in a suicide mode will have to approve them. Keep the bill separate of all other issues. Then do the same reimplementing some of the defense spending cuts if need be. Make the GOP show their true colors which is for the 1%. Ditto any other component of what is best for the country but re-institute one issue at a time.

    December 2, 2012 09:59 am at 9:59 am |
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