World Watching to See How US Will Solve Crisis: Geithner
As much as the world is watching to see how Europe will solve its debt problems, it also is focused on which approach the U.S. will take in solving its own similar issues, Treasury Secretary Timothy Geithner said.
Speaking just a few hours after President Obama released his plan to trim the U.S. deficit by up to $3 trillion, Geithner said in an interview with CNBC that if Congress needs to make sure political wrangling doesn't get in the way of a solution to the national debt problem.
"There's a lot more realization across the American political spectrum that we can't just put off these problems forever. If we try to put them off forever we're going to be hurting growth and hurting incentives for investment," he said. "We've just got to keep trying, keep looking for ways to get broader political support for a sensible package. That's what the president is doing."
Geithner spent the weekend offering advice to European countries on how to handle their sovereign debt issues, but received a somewhat frosty reception from leaders who believe the U.S. has its own mess to straighten out.
The Obama deficit-reduction plan figures on raising half the tab through tax cuts, including a likely levy that will be known as the Buffett Principle—named for billionaire investor Warren Buffett, who has protested that the very rich like him do not pay their fair share in taxes.
Geithner described the Buffett Principle as holding that "if you make a million dollars in the United States, you should be paying a share of income no less than what a middle-class family pays. It's a simple principle."
Congressional Republicans quickly rapped the planfor, among other things, including little in the way of entitlement reform.
But Geithner expressed hope that the warring sides in Washington can reach some type of consensus.
"This economy is much stronger than Washington, much more resilient than Washington," he said. "But ultimately the health of the economy in the long run will depend on our demonstrating that our political system can do a better job of helping to solve problems, not just debate the politics."
In addition to taxing millionaires, Geithner said the Obama administration is looking at tax incentives for businesses to spur hiring.
Included among them are lowering the corporate tax rate and closing loopholes, both of which Republicans have endorsed.
"Those things are very sensible, very good for growth. They've had broad bipartisan support in the past," he said. "There's just no reason why, with the economy growing more slowly, it doesn't make sense for Congress to enact those things now."