Geithner Floats Obama’s Next Potential Big Move: A Tax Hike on the Middle Class
August 3, 2009 - 12:01 AMTreasury Secretary Timothy Geithner made it clear on Sunday that the administration believes new federal revenues are needed, and he declined to rule out raising taxes on Americans earning less than $250,000 a year to get those revenues.
Geithner made it clear during the interview that the administration believes that new federal revenues are needed and he declined to rule out raising taxes on Americans earning less than $250,000 per year to get those revenues.
During the interview, host George Stephanopoulos pointed out to Geithner that the “Congressional Budget Office estimates that your budget will add $9 trillion to the national debt over the next decade.”
Stephanopoulos also noted that former Clinton Administration Deputy Treasury Secretary Roger Altman has said that a tax increase is needed.
“[I]ndependent analysts also say ... you're going to have to find new government revenues,” said Stephanopoulos. “The former deputy treasury secretary, Roger Altman, said: ‘It is no longer a matter of whether tax revenues must increase, but how.’ Is he right?”
Geither did not disagree with Altman.
“George it is absolutely right and very important for everyone to understand that we will not get this economy back on track, recovery will be not strong and sustained, unless we are--can convince the American people that we're going to have the will to bring these deficits down once recovery is firmly established,” said Geithner.
Geithner said the country is going to have to face what he called “a very difficult challenge: in getting the size of the deficit down.
“And the necessary path to fiscal responsibility, the necessary path to getting this country living within our means again is not just health care reform, to bring down those costs, but we're going to do a range of other things,” Geithner said. “And that's going to be a very difficult challenge to this country. We can do this, it just requires the will to act.”
Asked Stephanopoulos:”Including new revenues?”
“Well, we're going to have to look at--we're going to have to do what is necessary,” said Geithner. “Remember the critical thing is people understand that when we have recovery established, led by the private sector, and we have to bring these down, deficits down very dramatically. We have to bring them down to a level where the amount we're borrowing from the world is stable at a reasonable level. And that's going to require some very hard choices. And we're going to have to try to do that in a way that does not add to the--unfairly to the burdens that the average American already faces.”
Asked Stephanopoulos: “But that's the dilemma, isn’t it?”
“That is the dilemma,” agreed Geithner.
Then Stephanopoulos asked: “The president has said that taxes won't go up for any Americans earning under $250,000. But it doesn't appear he's going to be able to keep that promise if you're going to bring the deficits down.”
“George, again,” said Geithner, "we can't make these judgments yet about exactly what it's going to take and how we're going to get there. But the very important thing, and no one is going to care about this more than the president of the United States, is for people to understand that we do not have a choice as a country. That if we want an economy that's going to grow in the future, people have to understand we have to bring those deficits down. And it's going to be difficult, hard for us to do. And the path to that is through health care reform. But that's necessary but not sufficient. We're going to do some other things as well.”
Stephanopoulos then tried to get Geithner to rule out a tax increase, which Geithner would not do.
“So revenues are on the table as well?” asked Stephanopoulos.
“Again, we're not at the point yet where we're going to make a judgment about what it's going to take,” said Geithner.
“But you're not ruling it out. You can't rule it out,” said Stephanopoulos.
“Well, I think that what the country needs to do is understand we're going to have to do what it takes,” said Geithner. “We're going to do what's necessary.”