Timothy Geithner and John Boehner in fiscal cliff talks stalemate

Timothy Geithner, the US treasury Secretary, has said there will be no deal to avert a “fiscal cliff” unless Republicans accept a tax hike for the wealthy.

But House Speaker John Boehner has dismissed a 10-year plan, which aims to raise $1.6 trillion through tax rises and spending cuts, as “silliness”.

The two men met on Thursday as time runs out to broker a deal.

Economists warn planned tax rises and spending cuts due to take effect on January 1st could trigger a recession.

Timothy Geithner, negotiating for the White House, has drafted a plan that includes more spending to help for the unemployed and struggling homeowners, as well as cuts in Medicare and other benefits.

On Friday President Barack Obama warned of a “Scrooge Christmas” if soon-to-expire tax breaks for households earning below $250,000 were not renewed as part of the deal to avert the fiscal cliff.

But John Boehner, negotiating for the Republicans who control the House of Representatives, said talks with the administration had so far gone “almost nowhere”.

Timothy Geithner and John Boehner’s appearances on a number of Sunday television talk shows showed how entrenched their positions were.

US treasury Secretary Timothy Geithner has said there will be no deal to avert a fiscal cliff unless Republicans accept a tax hike for the wealthy

“There’s not going to be an agreement without rates going up. There’s not,” Timothy Geithner told CNN’s State of the Union.

He called on Republicans to make a counter-offer to the Obama administration’s plan.

But John Boehner said he was “flabbergasted” by Timothy Geithner’s proposals – which he said asked Congress to give up its power to set the nation’s debt limit.

“What do you think would happen if we gave the president $1.6 trillion of new money?” John Boehner asked Fox News Sunday.

“He’d spend it.”

John Boehner says asking the top 2% of US taxpayers to pay more would deal a “crippling blow” to a fragile economy, and has criticized the Obama administration’s proposed spending cuts as inadequate.

The White House has suggested it would not support any deal that did not increase tax rates on the wealthiest.

The fiscal cliff would suck about $600 billion out of the economy.

The measures were partly put in place within a 2011 deal to curb the yawning US budget deficit.

What is the fiscal cliff?

  • Under a deal reached last year by the White House and the Republicans, existing stimulus measures – mostly tax cuts – will expire on 1 January 2013
  • Cuts to defence, education and other spending will then automatically come into force – the “fiscal cliff” – unless Congress acts
  • The economy does not have the momentum to absorb the shock from going over the fiscal cliff without going into recession
Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.

Recent Posts

Spain: At Least 158 Killed In The Country’s Worst Flooding Disaster

At least 158 people have died in Spain's worst flooding disaster in generations. On October…

2 days ago

Russia Fines Google $20,000,000,000,000,000,000,000,000,000,000,000, Surpassing Global GDP

Google has been fined two undecillion (a two followed by 36 zeroes) roubles by a…

2 days ago

Financing Your Home Remodel: 7 Tips for Success

Embarking on a home remodel is an exciting journey, promising enhanced comfort, increased property value,…

2 weeks ago

Donald Trump Serves Up McDonald’s Fries While Kamala Harris Celebrates 60th Birthday with Church Choir

The US presidential candidates continued to campaign across key swing states on October 20. Footage…

2 weeks ago

America PAC: Elon Musk Promises to Award $1M Each Day to Swing States Voters

Elon Musk has said he will give away $1 million a day to a registered…

2 weeks ago

Canada Expels 6 Indian Diplomats Amid Khalistan Row

India and Canada have decided to expel their top envoys along with other diplomats as…

3 weeks ago