Geithner: Ready to Go Over 'Cliff' If Taxes Don't Rise
Treasury Secretary Timothy Geither told CNBC Wednesday 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 "absolutely" go over the fiscal cliff — triggering over $600 billion in automatic spending cuts and tax increases — unless tax rates increase on the top 2 percent of wage earners.
"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 told "Closing Bell."
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."
President Barack Obama told business leaders earlier in the day that a deal could be reached in a week if Republicans would accept higher tax rates on the wealthiest Americans.
"We're not insisting on rates out of spite, but rather we need to raise a certain amount of revenue," Obama told the Business Roundtable, an association representing chief executives of large U.S. firms.
(Read More: Forget the 'Fiscal Cliff,' Look at These Cliffs.)
After the meeting, Geithner told CNBC, "there's very broad support out there for not just extending these tax cuts for 98 percent 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. "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."
The Republicans have proposed $800 billion in additional tax revenues over 10 years as part any solution to the country's fiscal problems. Geithner said that Republicans haven't told us how they would raise the $800 billion dollars and what the mix of rates and limitations on deductions they would support.
Republicans were quick to hit back on talk that the administration was willing to go off the fiscal cliff if tax rates don't rise.
"This is one of the most stunning and irresponsible statements I've heard in some time," Republican Senator Orrin Hatch said in a statement. "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 president has proposed raising taxes by $1.6 trillion over the coming decade, cuts to Medicare and another $50 billion in stimulus spending, but has largely exempted Social Security from budget cuts. (Read More: Obama's 'Fiscal Cliff' Proposal: $1.6 Trillion in Tax Increases.)