Treasury Secretary Timothy Geithner said Wednesday the White House was willing to allow the fiscal cliff of austerity measures and tax increases to take effect if Republicans refuse to compromise on higher taxes for the wealthy.
In an interview with broadcaster CNBC, Geithner was asked if the Obama administration would consider going over the fiscal cliff if Republicans do not budge on taxes.
"Oh, absolutely," replied Geithner. "Again, we say there's no prospect to an agreement that doesn't involve the rates going up on the top 2 per cent of the wealthiest Americans."
He said the tax issues were necessary to have a well balanced approach to deficit reduction. The fiscal cliff that amounts to a $600-billion blow to the economy in 2013 was put in place by members of both parties to force their hand on deficit reduction after a stalemate last year.
Congressional Republicans earlier on Wednesday called on US President Barack Obama to offer a counter-proposal to their plan to avert the looming fiscal cliff of austerity measures and tax increases.
Speaker of the House John Boehner told reporters a Republican plan offered earlier in the week but dismissed by Obama, "was the balanced approach that the president has been asking for. Now we need a response from the White House, we can't sit here and negotiate with ourselves."
Obama and Boehner spoke by phone on Wednesday, CNN reported. There were no details about the conversation. It had been nearly a week since they talked.
Before the conversation Boehner called on Obama to send a counter-offer that can pass both chambers of Congress if he does not like the lawmakers' proposal.
In a meeting with business leaders Obama stood by his vow to raise taxes on the wealthy as part of any deal, and said if Republicans give on the issue a deal could be reached quickly.
"We can probably solve this in about a week. It's not that tough," he said. "But we need that conceptual breakthrough that says we need to do a balanced plan; that's what's best for the economy; that's what the American people voted for; that's how we're going to get it done."
White House spokesman Jay Carney clarified that "an agreement won't happen until they acknowledge rates have to go up."
Obama had dismissed as insufficient on Tuesday the Republican proposal that they say would lower deficit spending by $2.2 trillion over the next decade. The Obama administration had offered its own plan a week before that did not maintain the tax cuts on the wealthy the Republicans had sought to maintain.
Republican Majority Leader Eric Cantor on Wednesday said it was clear where both sides stood on tax issues, but called on the president to be more specific about spending cuts.
"We ask the president sit down with us, and be specific about the spending so we can finally solve the problem," he said.
The conservative Republicans said their plan would slow the growth of the national debt by raising $800 billion in new tax revenues - without hiking income tax rates - slicing $600 billion from federal health programmes and adjusting the calculation of inflation to save $200 billion on Social Security pensions.
It includes $300 billion in savings from other mandatory programmes, such as farm subsidies. Added together with other, smaller cuts, it would produce $2.2 trillion in new savings, the Republicans said.
Most Popular Stories
- Prosecutor to Investigate Walmart Police Shooting
- GM to Announce New Jobs in Tennessee
- Emirates Hit Libyan Targets With Airstrikes
- Michael Brown Funeral: Can Americans Change the Script of Violence?
- Smith & Wesson Misses Target
- American Killed With ISIS Fighters in Syria
- Surf's Up! SoCal Prepares for Big Storm Surf
- Marco Rubio Warns Obama on Deportations
- Hamas Claims Gaza Ceasefire as Victory Over Israel
- Ford Hires 300 at Louisville Lincoln Plant