Saturday 27 December 2014

'Fiscal cliff' is real risk – Geithner

Published 03/12/2012 | 05:00

Timothy Geithner: wants EU action on interest rates

PRESIDENT Barack Obama's finance chief said he "can't promise" that the US won't go over a "fiscal cliff" of sharp tax hikes and spending cuts at the end of the year.

Treasury Secretary Timothy Geithner yesterday predicted a deal will be cut to prevent such a crisis, with the Republican Party agreeing to raise tax rates on the rich.

"That's a decision that lies in the hands of the Republicans that are now opposing an increase in tax rates" for the wealthiest Americans, Mr Geithner said in a TV interview.

With polls showing that most Americans favour raising tax rates on the wealthy and cracks starting to appear in what had been a wall of Republican opposition to such a move, the Obama administration figures it has the upper hand.

But the most senior Republican, Speaker of the House of Representatives John Boehner, stood firm and renewed his stand against increased tax rates.

"When you increase rates, you make it more difficult for our economy to grow," he said on Fox News.

Mr Boehner said that if Republicans agreed to give Mr Obama a proposed $1.6trn in new tax revenue, "he's going to spend it", not reduce the deficit.

"I don't want any part of going over the cliff. I'm going to do everything I can to avert that," he said. (Reuters)

Irish Independent

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