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Today, Secretary Geithner spoke to CNBC's Steve Liesman during a live television interview broadcast from the Diplomatic Room of the Treasury Department where he discussed the need to reach an agreement on the so called “fiscal-cliff” that will strengthen the economy and support job growth. Discussing the President’s plan to bolster the economy, strengthen the middle class and reduce our deficits in a balanced way, the Secretary reiterated the Administration’s call to Congressional leaders to agree to raise tax rates on the wealthiest few and work with the Administration toward a sensible, serious approach to cutting spending:
Secretary Geithner: What we're trying to do is put in place a comprehensive, balanced set of fiscal reforms that put us back on the path to living within our means and create room for investing to make the economy stronger, make sure we're protecting Medicare for future generations, and forcing the government to use the taxpayers' resources more wisely.
In that context, you have to have a significant amount of revenues. We don't see a way of doing it that makes any sense or has any political viability without rates going up as part of that deal. Again, the size of the problem in some sense is so large it can't be solved without rates going up. I think there's a broad recognition of that reality now.
If you listen carefully to the talk not just in this town, but you hear what businesses and investors say, I think there's broad recognition that rates are going to go up as part of a deal. I think that's a welcome change. That's why I said I think there's been some progress, and I think we're going to get there.
Secretary Geithner: Again, what we've said is that if Republicans recognize this basic reality that rates are going to have to go up as part of a balanced plan, then… we will be prepared to do a substantial amount of meaningful reforms and savings on the spending side, including entitlements. We're going to take a careful look at how to do that. We're going to want to make sure we're protecting seniors, not just shifting more cost on to them. We think there's room for movement on that side.
In addition, Secretary Geithner explained why the debt limit and the threat of default cannot be used to hold the economy hostage:
Secretary Geithner: I spend a lot of time talking to investors in the United States, small businesses, large businesses. I think there's very broad agreement with the position we're taking, which is we are not prepared to have the American economy held hostage to threats that Republicans will force the country to default on our obligations. 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. We are not prepared to put the economy through that. It makes no sense for them to try and do that. Again, it's just too damaging. If you look back to what happened the summer of 2011, you can just see how damaging that was at that time. We're not going to make the American people pay the price again for a group of minority Republicans that say they want to threaten to default occasionally.
Before the interview concluded, the Secretary reiterated the President’s commitment to reducing the deficit in a way that helps grow the economy through sensible investments in things like education and infrastructure:
Secretary Geithner: Again we're trying to make sure we're doing something that's going to be good for economic growth in the country in the interest of the average American. So we think as part of a balanced framework, we think there's going to be some room to make some investments in education and infrastructure, things that are good for the long-term growth prospects of this economy. We're going to look at the overall mix through that basic prism about what's going to be good for economic growth here in the United States.
Anthony Reyes is the New Media Specialist at the U.S. Department of the Treasury.