Geithner: It’s good to scrap some tax cuts
ing Americans, Geithner said, while sending an important message to the world about WASHINGTON — As the commitment to fiscal austerWhite House geared up fority.a fight to end the Bush admin“We think that’s the responistration’s tax cuts, Treasury sible thing to do,” Geithner Secretary Timothy Geithner said, speaking to Jake Tapper said Sunday that allowing the on ABC’s “This Week.” “We expiration of those targeted at need to make sure we can show wealthy Americans was “the the world that we’re willing as responsible thing to do” and a country now to start to make would not deter economic some progress bringing down growth. our long-term deficits.”
The president’s plan would But Republicans and even end tax cuts for only 2 or 3 some Democrats are unsure percent of the highest-earn-about the wisdom of raising taxes at this point in the economic recovery. Among those affected by the increases would be business owners, bracing for the tax hit at exactly the moment when economic recovery depends heavily on whether they create jobs.
The tax cuts will expire next year, if Congress and the president don’t act to extend them. Republicans and some Democrats favor continuing them all, at a cost of adding at least $2 trillion to the federal deficit over the next 10 years.
Geithner, who also spoke on NBC’s “Meet the Press,” said he didn’t think there was a chance that all of the Bush tax cuts would survive, even for a year or two.
“I don’t believe it should,” he said, “and I don’t believe it will.” Obama has supported continuing only those for lower-income and middleclass workers, which would cost slightly less. He has suggested keeping the cuts in place for individuals making less than $200,000 a year and for families earning less than $250,000.
The brewing fight is stoked by the fact that every member of the House and a third of the Senate is on the campaign trail now. Republicans hope to take control of one or both chambers from Democrats in the November elections, at the midpoint of Obama’s first term. The party in control of the White House historically loses several seats at the midterm.