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In PR push, Geithner argues against extending all Bush tax cuts

By Brady Dennis

Treasury Secretary Timothy F. Geithner continues the administration's recent public relations push later this afternoon with a speech on tax and fiscal policy at the Center for American Progress, in which he plans to argue that responsible stewardship of the nation's finances can lead to economic growth, prosperity and job creation.

"Over the past two decades, Washington ran an experiment on that front," Geithner said in prepared remarks. "In the 1990's, the government put an end to budget deficits, and America enjoyed a period of growth led by the private sector where prosperity was widely shared and job creation was robust. Over the next decade, Washington tried a new path, running up huge debts, while incomes for most Americans stagnated and job creation was anemic. We are living today with the damage that misguided policy caused."

The speech comes amid a heated debate over what to do about a series of tax cuts instituted under President George W. Bush that will expire later this year. The Obama administration wants to extend cuts that apply to families making less than $250,000 a year, while allowing the cuts to expire for the wealthiest Americans. Republicans have pushed to have all the tax cuts extended, insisting that doing otherwise could further stunt economic growth.

"Borrowing to finance tax cuts for the top two percent would be a $700 billion fiscal mistake," Geithner plans to say. "It's not the prescription the economy needs right now, and the country can't afford it."

Earlier this week, Geithner traveled to New York for a speech in which he argued to the financial community that the recent financial overhaul bill signed into law by Obama ultimately will bring stability to the financial system and create the atmosphere for long-term growth. Other top-ranking Treasury officials are fanning out across the country carrying a similar message. On Wednesday, Assistant Secretary Michael Barr spoke on that subject to the Charlotte Chamber of Commerce.

"As we go about the task of implementing these reforms, we will be criticized by some for going too far and by some for not going far enough," Barr said, according to a copy of his remarks. "This distinction is stuck in a debate that presumes that regulation -- and efficient and innovative markets -- are at odds. In fact, the opposite is true. Markets rely on faith and trust. Markets require clear rules of the road. Consumers rely on the trust and fair dealing of financial institutions. And for all our sakes and that of our economy, we must restore honesty and integrity to our financial system."

By Brady Dennis  |  August 4, 2010; 1:11 PM ET
Categories:  U.S. Economy , U.S. Treasury  
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Comments

Reagan proved deficits mattered. That's why he quickly reversed some of the 1981 ERTA tax cuts in 1982 and 1984.

A Republican recognizing reality. Haven't seen that for quite a while.

Posted by: Garak | August 4, 2010 2:28 PM | Report abuse

His comments "don't extend all of Bush's tax cuts" translates to "extend" tax cuts minus a few for "public perception" purpose.

Posted by: Anonymous | August 4, 2010 2:30 PM | Report abuse

An ongoing and inexorable shrinkage of the tax base that funds government activities. Governments become slaves to global bond markets. Political instability. Increasingly fractious political discourse. Increasing violence. A rise in criminality and corruption. http://globalguerrillas.typepad.com/globalguerrillas/2010/07/journal-the-decline-of-the-middle-class.html Hundreds of US companies outsource such as: IBM, Microsoft, Oracle, Cisco, Prudential, Hewlett Packard, ATT Wireless, TransUnion, First Consulting Group (FCG), Dell Computer Support,Bell South, EDS, GE Capital, GE, IBM, Schlumberger, Qwest and Rand McNally. http://www.bizbrim.com/outsourcing/companies-that-outsource.htm http://www.cnn.com/CNN/Programs/lou.dobbs.tonight/popups/exporting.america/content.html HUNDREDS & HUNDREDS of Additional Outsourced US Jobs from HUNDREDS & HUNDREDS of US companies.

Posted by: Anonymous | August 4, 2010 3:35 PM | Report abuse

Regulations, Reforms, Comprehensive are all WORDS continuously used by Obama & Co. THEY don't even know what THEY mean!!

Posted by: Anonymous | August 4, 2010 4:09 PM | Report abuse

"Borrowing to finance tax cuts for the top two percent would be a $700 billion fiscal mistake..."

Finally, Democrats are using Roveian Propagandaspeak against the Republicans. Sounds good.

Posted by: Anonymous | August 4, 2010 4:39 PM | Report abuse

Considering all the Bush tax cuts are being paid for using BORROWED money - none of them sould be extended.

Let the tax rates fall back to where they were under Clinton. Remember back when we had a surplus?

Posted by: Anonymous | August 4, 2010 4:49 PM | Report abuse

So, let me get this straight:

The problem with high unemployment and negative economic growth is that consumers and investors have too much money and it needs to be taken into the federal government to be distributed as they see fit.....More regulations, more red tape, more bureaucracy, more union power and less individual freedom will create more jobs and help increase our country's ability to compete in a global market place.

Anyone that believes this administration needs to wake up and smell the impending bankruptcy....

Posted by: Anonymous | August 4, 2010 5:26 PM | Report abuse

The largest part of the debt increase over the last ten years is the Bush tax cuts and the cost of every piece of legislation is inflated by those horrific cuts. Personally I would not extend the Obama cuts either.

Posted by: jbowen431 | August 4, 2010 5:27 PM | Report abuse

The PARTY OF NO will not vote for a small amount of help for the unemployed and those in dire need of help, but will vote for a $700Billion extension of tax cuts for the wealthy. If that is not proof positive of their detatched nature of doing things, there is none. They are working only for themselves and their owners in the special interest arenas. The only hope for this nation is to throw the Repubs out en masse.

Posted by: ronjeske | August 4, 2010 5:37 PM | Report abuse

It's amazing that the Republicans, who claim that emergency unemployment benefits and food stamps are too expensive given the deficit, can be feckless enough to support extending $700 billion in tax cuts to the rich. The country was already bankrupted to support Bush's misguided wars and tax cuts, but why assess anything with an open mind? Alas, if only Americans were paying much attention to the hypocrisy!

Posted by: glcorbett | August 4, 2010 5:44 PM | Report abuse

Geithner needs to take a moment and think about what he is saying.

The reason we had the ability to stop running deficits in the 1990's was becuase the Republicans stopped spending recklessly and implemented "pay as you go" financial management in Washington. This simple formula that every regular household in the United States lives by worked in Washington for a period of time. The Bush Tax cuts were designed to level the amount of cash Washington was collecting with what was being spent.

Unfortunately, spending increased for a number of reasons and the country elected Obama who has spent more money faster than any other president in our history. Add to this the monumental cost of the health care bill which we do not need and Obama has created a problem. There is no way to reduce the deficit without reducing spending. We simply cannot tax enough to payoff the ridiculous deficits being created by this administration and the Democratic controlled legislature. If Obama tries raising taxes, the economy will stall and then the problem will be worse. No one wins in a double or triple dip recession.

High unemployment and under employment are a constant drag on our economy. Raising taxes only increases the amount of drag and reduces the amount of free cash everyday people have to spend. Increasing the amount of free cash drives economic growth and begins to allow small business to hire workers. That leads to economic growth. Increased Taxation only leads to reduced growth. We have to CUT FEDERAL SPENDING NOW funding only the most necessary items and "pay as you go". That is our salvation, it worked before, it will work again.

Posted by: cmsjkj | August 4, 2010 6:04 PM | Report abuse

Are we really to take tax advice from Geithner? I know we are subject to his whims, but, we don't have to accept his twisted ideology.

Posted by: Anonymous | August 4, 2010 6:07 PM | Report abuse

There is a whole bunch of logic to collecting more taxes. A government re-distributing wealth however is questionable, and history shows, not very effective at it. What is odd is, how so many think it is okay, to seize someone else's money, for their ideas, of how money , someone else's, should be spent?

Posted by: dangreen3 | August 4, 2010 6:17 PM | Report abuse

Geithner can't even get his own taxes reproted correctly. Why should anyone believe him on this?

Posted by: gfafblifr | August 4, 2010 6:23 PM | Report abuse

Republicans have a "tax-break" mentality that has driven this country on the brink of financial disaster. The more they give to the wealthiest, the more they add to the deficit: Washington Post - "Republican congressional leaders said the bill was essential to sustain economic growth, while Democrats and some Republicans argued the tax cuts would mainly benefit the wealthy and compound the nation's long-term deficit and debt problems. The budget deficit was expected to exceed $300 billion in 2006. Opponents said the government could not afford the loss of $69 billion in tax revenue over five years.
The Washington Post reported that "middle-income households would receive an average tax cut of $20 from the agreement, according to the joint Urban Institute-Brookings Institution Tax Policy Center, while 0.02 percent of households with incomes over $1 million would receive average tax cuts of $42,000."
Sen. Olympia Snowe (R-Maine), an opponent of the bill, said "the preponderance of these revenues will go to upper-income people, people who make a million dollars or more."
According to The Post, opponents said some of the "tax revenue raisers" would merely defer further loss of tax revenue to a later time. "One measure would allow upper-income savers with a traditional individual retirement account to pay taxes on the account's investment gains and then roll over some of the balance into a Roth IRA, where the money can be withdrawn tax-free upon retirement," The Post reported. "The provision would raise about $6.4 billion over 10 years, seemingly keeping the size of the tax-cutting package down. But over the next 35 years, it would cost the government $36 billion, according to the Urban Institute."
Supporters said the tax cuts would spur economic growth, which would reduce the deficit as businesses and individuals use tax savings to hire more workers, expand existing businesses and spend in the consumer economy."
So did it? I think not. Same old policies from the Republicans...give to the rich, take from the middle-class.

Posted by: bevmariec | August 4, 2010 6:30 PM | Report abuse

Reverse Socialism at its best - Republican definition of "wealth distribution" - Take from the middle-class, children, the poor, and the other classes Lady Liberty welcomes and give to the wealthiest so they can thumb their nose to the american worker. Republicans and their monarchy; forget democracy if they take back control of our government.

Posted by: bevmariec | August 4, 2010 6:38 PM | Report abuse

This is our money this tax cheat is discussing. Liars, thieves, and intellectual phonies.

Posted by: Anonymous | August 4, 2010 6:45 PM | Report abuse

Too bad for some guys who use to get $300K paycheck every month and now they are going to get only $150K a month..........................awwwhh, they must be missing good ol' Georgie & Dickey Inc......Incorruption!!!

Posted by: BOBSTERII | August 4, 2010 7:48 PM | Report abuse

Kill all the GD Bush Reich tax cuts NOW!!! REWARD THE RICH, PUNISH THE POOR, VOTE REPUBLICAN!

Posted by: Bushwhacked1 | August 4, 2010 8:16 PM | Report abuse

The selfish comments by some are truly amazing, don't you think? How can someone who makes a million or two a year be so self centered? How can they deny the government they profess to love the reduction in the deficit? After all the deficit was created by their heroes Bush/Cheney!

Posted by: janetal2004gmailcom | August 4, 2010 8:32 PM | Report abuse

They just wasted 700 billion on Disability Fraud.

Posted by: Anonymous | August 4, 2010 8:49 PM | Report abuse

Geithner never paid his taxes so why should he care?
700 billion was wasted on the Stimulus to give cocaine to monkeys, 1.9 million study "exotic ants", yoga for menopausal women, 2 million on dance software, 1/2 million to replace windows on a State park that is closed. 1.2 million to restore an old train station.
Has a person on welfare ever offered you a job? The top 2% of Americans already pay 40% of the taxes. 40% of Americans don't even pay taxes.
I would rather the "rich" keep their money to run the businesses that hire and create real jobs, than give it to Washington to waste.

Posted by: Anonymous | August 4, 2010 8:57 PM | Report abuse

Yeah, the very rich need welfare. How did Bush and Cheney fool SO MANY folks who are never benefitted from the tax-cuts for rich folks? Boggles the mind. SOme of them still don't get it.

Posted by: free-donny | August 4, 2010 9:32 PM | Report abuse

Look,
Those of us who were self emplyed and IN the middle class in the 70's and 80's when taxes were high, knew when when we were close to going into the next tax bracket where our taxes would jump up 3 to 8%

When we thought we were close to going into the next tax bracket we hired another employee or two OR bought a peice of equipment we were needing but putting off to keep us in the lower tax bracket. In this environment, as much as I hate to say it, RAISING TAXES IS THE JUST THE STIMULAS NEEDED TO JUMP START THE EC0NOMY

Posted by: Anonymous | August 4, 2010 10:31 PM | Report abuse

The economy is always grown from the ground up. If you help someone buy there first cell phone, their first computer, etc etc. then they end up growing the entire economy. Grow and expand the lower and middle class America and you will grow the ecomomy.

Posted by: Anonymous | August 4, 2010 10:38 PM | Report abuse

The truth is that the country can't afford to extend ANY of Bush's tax cuts! The GOP is so worried about deficits? Then just let Bush's toxic tax cuts die a natural death. We can go back to the perfectly reasonable tax levels we had during the Clinton administration. Back then we didn't HAVE a deficit, and I seem to remember that the economy was in good shape! Imagine!

Posted by: SuziQ | August 4, 2010 10:54 PM | Report abuse

53% of the people pay federal taxes. Obama seems insistent on increasing the number of folks that don't contribute. Certainly those are the folks that support him. I'm coming to the opinion that if you don't contribute to the federal government, you shouldn't have much of a say. Especially in matters of income re-distribution.

Posted by: USMC03sje | August 4, 2010 11:25 PM | Report abuse

Tim Geithner is a blood sucking elitist. Apart from his three year stint working for the King of the blood suckers, Henry Kissinger, and the CFR, the FED, Bilderbergs, etc., he has sold his soul to the devil for a few bucks.

The truth is we're bankrupt as a nation. We cannot pay our debt, nor can our children or their children in the future. All the money of the world has been stolen by the Elitists. There will be no money to pay the 401k's, there is no money in the banks, nada. So they can extend the tax breaks or not, it does not matter. We are entering into the financial abyss and when we are fully submerged be prepared for an unimaginable rudimentary existence.

Posted by: Anonymous | August 4, 2010 11:27 PM | Report abuse

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