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Financial Planning > Tax Planning > Tax Reform

Geithner: Ready to Go Over ‘Fiscal Cliff'

By John Sullivan

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Hold on tight, here we go.

Treasury Secretary Timothy Geithner didn’t mince words in an interview with CNBC on Wednesday, telling the network that Republicans are “making a little bit of progress” in “fiscal cliff” talks but said the Obama administration was “ absolutely” ready to go over the cliff if the GOP doesn’t agree to raise tax rates on the wealthy.

“I think they’re making a little bit of progress,” Geithner said. “They’re clearly moving and figuring out how to try to move further.”

But Geithner said the White House would go over the cliff–triggering over $600 billion in automatic spending cuts and tax increases–unless tax rates increase on the top 2% of wage earners, a theme he’s consistently trumpeted recently.

“What we’re trying to do is put in place a comprehensive, balanced set of fiscal reforms that put us back on the path of living within our means,” Geithner said.

The network notes that Geithner, who is the Obama administration’s lead negotiator in the cliff talks, added that if Republicans are willing to accept higher rates, “we think we can do something really good for the economy. We can make the government use the taxpayers’ money much more efficiently, lock in some spending savings and do some long-term reforms to entitlements.”

Geithner also told CNBC, “There’s very broad support out there for not just extending these tax cuts for 98% of Americans, but for an agreement that has rates going up with tax reforms that limit deductions alongside a set of substantial long-term savings on the spending side.”

Geithner said the administration also wants an agreement on raising the debt ceiling.

“We are not prepared to have the American economy held hostage to periodic threats that Republicans will force the country to default on our obligations,” he said, according to CNBC. “That would be a terrible thing for the financial security of the average American, for business, for confidence around the world in the United States.”

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