Timothy Geithner, GOP dig in on tax rates

Far apart on hike for the wealthy

Congressional Republicans and Treasury Secretary Timothy F. Geithner, the lead negotiator for the White House, used the Sunday television news shows to shore up their positions and blame the other side for the impasse.
Chris Usher/CBS News/AP
Congressional Republicans and Treasury Secretary Timothy F. Geithner, the lead negotiator for the White House, used the Sunday television news shows to shore up their positions and blame the other side for the impasse.

WASHINGTON — Treasury Secretary Timothy F. Geithner defended President Obama’s proposals for long-term deficit reduction on Sunday and insisted that Republicans were blocking compromise by refusing to let the George W. Bush-era tax cuts for wealthy American expire as scheduled on Dec. 31.

Obama and Democratic lawmakers want to extend the tax cuts on annual household income below $250,000 but not for income above that level, as the president vowed in his reelection campaign.

‘‘Those rates are going to have to go up,’’ Geithner said of the highest tax levels. ‘‘That’s an essential part of a deal.’’


‘‘There’s just no reason why 98 percent of Americans have to see their taxes go up because some members of Congress on the Republican side want to block tax rate increases for 2 percent of the wealthiest Americans,’’ he said. ‘‘Remember, those tax rates, those tax cuts, cost a trillion dollars over 10 years.’’

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At a stalemate in their talks to avoid a self-imposed fiscal crisis at the end of this month, congressional Republicans and Geithner, the lead negotiator for the White House, used the Sunday television news shows to shore up their positions and blame the other side for the impasse.

‘‘Right now, I would say we’re nowhere, period. We’re nowhere,’’ House Speaker John A. Boehner, an Ohio Republican, said on ‘‘Fox News Sunday.’’ ‘‘We’ve put a serious offer on the table by putting revenues out there to try to get this question resolved. But the White House has responded with virtually nothing.’’

Geithner appeared in taped interviews on five programs.

The televised jousting reflected the posturing that is typical in the early stages of Washington budget negotiations, with leaders of each party seeking to persuade the public of the rightness of its position and to bring pressure on the other side to compromise.


But now, the White House and Congress do not have much time for the usual negotiating games, with the year-end deadline looming and the holidays approaching.

Without a deal offering an alternative, across-the-board cuts in domestic and military programs and immediate tax increases for all Americans — the result of the expiration of the Bush-era tax cuts — would take effect in January.

Together, the automatic spending cuts and tax increases would cut the deficit for fiscal year 2013 by more than $500 billion, an amount so sudden and large that economists say it would cause a recession. They have called the event the fiscal cliff.

“I don’t want any part of going over the cliff,’’ Boehner said on “Fox News Sunday.’’

Geithner, also on Fox, said that whether the nation does so is ‘‘a decision that lies in the hands of Republicans who are now opposing an increase in the tax rates.’’


The goal of both Obama and Congress is a package of alternative spending cuts and revenue increases. Republicans, led by Boehner, have since the president’s reelection offered to accept higher revenue, but they have refused to support a partial extension of the Bush tax cuts that would let the top income tax rates rise to 39.6 percent, the level from the Clinton administration, from the current 35 percent.

The separate television appearances by the two men came after their private meeting on Capitol Hill on Thursday, when Geithner outlined the president’s positions for about $4 trillion in deficit reduction over the first 10 years to Boehner and the number-two Republican in the House, Eric Cantor of Virginia.

The specifics were the same as those proposed by Obama in his budget earlier this year, without any additional concessions.

They included $1.6 trillion in new revenue from upper-income taxpayers; $600 billion in reduced spending for Medicare, Medicaid, farm subsidies and other programs; $1 trillion in other spending cuts that he and Congress committed to last year for the coming decade; and $800 billion from projected war spending reflecting the winding down of combat operations overseas.

Obama’s plan also contains $200 billion in new spending on unemployment benefits, public works, and aid for home­owners.

As he had late last week, Boehner, in his Fox appearance, dismissed the administration’s offer as ‘‘a non-serious proposal’’ for including too little in spending cuts and too much in additional stimulus measures, and for letting the top income-tax rates rise, which Boehner said would hurt some small businesses.

On television, he recounted his reaction to Geithner at the meeting last week.

‘‘I was flabbergasted.’’ Boehner said. “I looked at him and said, ‘You can’t be serious.’ I’ve just never seen anything like it. You know we’ve got seven weeks between Election Day and the end of the year, and three of those weeks have been wasted with this nonsense.’’

The speaker said Republicans had proposed ‘‘a dozen different ways’’ to raise additional tax revenue without raising rates.

But he did not say what those were, and so far the Boehner office has not provided details. Administration officials said Republicans have made no specific proposals.

Generally, Republicans, much like Mitt Romney in his presidential campaign, have proposed without specifics that additional revenue could be raised over 10 years by limiting tax deductions for the wealthy, rather than raising their rates.

But the White House and nonpartisan policy organizations have done analyses showing that revenue cannot be raised on that scale without ending popular deductions for mortgage interest, charitable contributions, and state and local taxes, even for some middle-income taxpayers.

Geithner, on ABC’s ‘‘This Week,’’ said the ball is absolutely in Republicans’ court to put down specific alternatives.

‘‘They understand that,’’ he said of Republican leaders. ‘‘And when they come back to us and say, ‘We would like you to consider this, and we’d like you to consider that,’ we’ll take a look at that.’’