Geithner: Ready to go over 'cliff' if necessary
Treasury Secretary Timothy Geithner said Wednesday that the Obama administration is "absolutely" ready for the U.S. economy to go over the "fiscal cliff" rather than accept a budget deal that doesn't include higher tax rates for top earners.
Geithner said the administration thinks budget deficits are so large that they can't be closed without boosting tax rates on the highest-earning 2 percent of Americans. Most Republicans oppose higher rates for any taxpayers.
"There's no prospect in an agreement that doesn't involve those rates going up on the top 2 percent of the wealthiest Americans," Geithner said in an interview on CNBC.
Geithner's comments immediately drew fire from a top Republican senator.
"This is one of the most stunning and irresponsible statements I've heard in some time," said Sen. Orrin Hatch. "Going over the fiscal cliff will put our economy, jobs, people's paychecks and retirement at risk, but that is what the White House wants, according to Secretary Geithner, if they don't get their way."
The fiscal cliff refers to the tax increases and deep spending cuts that will take effect in January unless Congress and the White House reach a budget deal first.
In the interview, Geithner also said the administration would reject a budget plan that didn't include an increase in the federal borrowing limit. The current limit is expected to be reached either late this month or early next year.
"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," Geithner said. "That would be a terrible thing for the financial security of the average American, for businesses, for confidence around the world and the United States."
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.