Politics
Obama not budging on taxes in fiscal cliff negotiations with GOP
Administration officials are hardening their warnings that Obama is willing to risk going over the cliff. Treasury Secretary Timothy Geithner said Wednesday that the Obama administration is “absolutely” ready for that risky step.
Geithner said in an interview on CNBC the administration thinks budget deficits are so large that they can’t be closed without boosting tax rates on the wealthiest 2 percent of Americans. He also said that the administration would reject a budget plan that didn’t include an increase in the federal borrowing limit, which is expected to expire early next year. However, Geithner said he still thinks progress is being made in the budget negotiations and that the outlines of an agreement are becoming clearer.
“They look inevitable,” he said.
Speaking to business chieftains Wednesday, Obama warned Republicans not to inject the threat of a government default into negotiations over the fiscal cliff as a way of extracting concessions on spending cuts. “It’s not a game I will play,” he said, recalling the brinkmanship of last year in which a budget standoff pushed the Treasury to the edge of a first-ever default and led to a downgrade of the U.S. credit rating.
While saying he is willing to accept some reductions in government programs such as Medicare, the highly popular federal health insurance programs for older Americans, he flatly rejects Republican contentions that they can raise about US$800 billion in additional government revenue over a decade by closing loopholes and narrowing tax deductions on the wealthy, rather than raising income tax rates. The opposition argues increasing rates from 35 percent to 39.6 percent as Obama wants would impose a particularly harmful impact on the economy and job creation at a time when the country is still struggling to recover fully from the deepest recession in decades.
The White House has ridiculed the Republican plan as “magic beans and fairy dust.”
Copyright 2012 The Associated Press
