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CROWLEY: Let me ask you, the reaction to your going up on the Hill and saying, hey, this is basically the White House position has been -- Mitch McConnell saying I think it was just demeaning for them to ask the Treasury Secretary to come up here and give a proposal like this, and by this we have people saying it's a sham, it's -- you know, ridiculous, it's a nonstarter.
When you went up there, you didn't think Republicans were going to go good idea.
GEITHNER: You know, what we're trying to do is get these guys to come together and reach an agreement that's going to be good for the country and good for the economy.
CROWLEY: By these guys you mean you all and the Republicans.
GEITHNER: And Democrats together.
CROWLEY: And the White House.
GEITHNER: That's what we're trying to do. And what we did was put forward a very comprehensive, very carefully designed mix of savings and tax reforms to help us put us back on the path to stabilizing our debt and fixing our debt and living within our means. We've been very detailed about how to do that both on the spending side and revenue side, and we think this is a good plan for the country. And it does the most important thing, Candy, which is it gives 98 percent of Americans the certainty your taxes aren't going to go up, and it gives us the chance to make sure we're protecting Medicare for future generations and it gives us the ability to lock in a set of carefully designed reforms that put us back on the path to fiscal balance.
So its a very good plan, and we think it's a good basis for these conversations.
CROWLEY: It's a starting point because when you look at it, the president said in September I am still willing to deal with Republicans and, you know, $2.50 worth of cuts for every dollar's worth of revenue raising. And this, of course, is nowhere near that.
GEITHNER: No, that's not true. What we are proposing is very consistent with that. Which is we have roughly $2 of spending cuts if you include what's already been enacted.
CROWLEY: Well, does that count here? I mean, if it's already enacted.
GEITHNER: No, of course, it counts.
CROWLEY: This is now -- that was your debt ceiling deal, correct?
GEITHNER: No, that was - again let's just go back. And we've been having this conversation with Republicans for about 18 months. And from the beginning what we all agreed is we need roughly $4 trillion in savings over ten years. Now we've been doing that in stages. We did $1 trillion in spending cuts up front. And we proposed a balanced mix of change on the tax side and spending side to go beyond that, and look at it together, it's roughly two to one spending cuts versus tax increases.
Now, we've been very detailed about what we can do on the spending side. We proposed $600 billion in cuts in health care programs, other mandatory programs over ten years. Now Republicans are -- we don't expect them to like all of these proposals, but all we can do is lay out what we belief in and then ask them to come back to us and tell us what they would prefer to do.
CROWLEY: One of the things that the senate Republican leader Mitch McConnell said was, listen, if you take higher premiums for the wealthy in Medicare, you increase the eligibility age in Medicare to eventually bring it to the parody of Social Security. If you slow the costs of living in Social Security and other entitlements thing we're at the table, we're dealing with revenue. That good with you, those things?
GEITHNER: Well, you know, there are a lot of ideas out there - a lot of idea from Democrats, from Republicans.
CROWLEY: Right, but how about these specific ones?
GEITHNER: Well, you know again there's a lot of ideas out there, but what i can do today is explain to you what we think makes the most sense and what's in the proposal today. And again, we're prepared to listen to what Republicans suggest we do, but we can't react until they've given us a proposal we can look at and see how it all fits together.
CROWLEY: Because they have your proposal? They put on a piece of paper. We were told there wasn't an actual plan that you just sort of told them. So there's an actual plan on a piece of paper saying here it is.
GEITHNER: Again we've laid out a very comprehensive detailed framework of how we do it and in what stages with $600 billion of spending cuts spread over ten years in entitlement programs. And you I think right now the best thing to do is for them to come to us and say, look, here's what we think makes sense. We've told them what we think makes sense. What we can't do is try to figure out what's going to be good for them. They have to come tell us.
CROWLEY: Well, and by that you mean in terms of cutting, because you know what they want in taxes. They don't want to have tax rates go up on the wealthy. You know that they want to do something about entitlements. And the way this looks to them, if you take the Republican side of this having seen your plan today, the administration's plan today, is they're asked to do $1.6 trillion in revenue raising or tax increases, however you want to say it, and there is no certainty of any cuts here. There's sort of -- here's this $400 billion, and, you know, it's not guaranteed but we'll talk about it next year. If you're a Republican, you don't take that deal. $50 billion in stimulus, so that's more spending, not less. There's just a lot of things in the air, and not to mention you all want to control the debt ceiling. That's just not -- I mean, you can understand how that's a nonstarter for them.
GEITHNER: No, it shouldn't be.
Again let me -- that's not what we're proposing. Let me explain what we're proposing. We're proposing a balanced mix of detailed changes on tax policy -- higher rates and limited deductions for the wealthiest Americans alongside detailed measurable up front reforms on other government programs, so that together...
CROWLEY: Such as?
GEITHNER: Again, in Medicare, in health programs, other mandatory programs. We've just laid out $600 billion in details. I'll give you a couple of examples, but you can look at the details. We proposed to reform and limit farm subsidies, which can save a significant amount of money. And in health care we proposed things, like, for example, raising premiums modestly for higher income Medicare beneficiaries. We propose to get the government much smarter in how it purchases medicine. So those are just three examples,. But there's $600 billion of detailed policy in that basic program which along side the trillion we did together that's already in place and the savings we get from winding down these wars is a very substantial package of reforms.
CROWLEY: But you have got a $16 trillion debt, and you did $1 trillion of it. And that was in order to get your debt ceiling raised. So, how does that count...
GEITHNER: It counts because it reduces the deficit. What we're here trying to do is to reduce the long-term deficit. So the test...
CROWLEY: Because they want new ones, as you know, the Republicans?
GEITHNER: Yeah and again, and we're prepared to do these on the spending side. But what we're not going to do is extend those tax cuts for the wealthiest Americans. Remember those cost $1 trillion over ten years. And there's no possibility that we're going to find a way to get our fiscal house in order without those tax rates going back up.
Now again, alongside that, we're prepared to do some very detailed things on the spending side, and we're prepared...
CROWLEY: But there's no guarantee, right? Didn't that say that in that thing, at least according to the read-out we got of your plan, so you can feel free to correct me because you haven't given me a read-out of it. GEITHNER: Guaranteed up front measurable savings scored by CBO enacted into law. The only guarantee on this side, as you know, when congress enacts policies.
CROWLEY: Right, but you would be willing to go for specific things and guarantee that there would be a specific amount of cuts?
GEITHNER: Of course, of course.
CROWLEY: But that's next year?
GEITHNER: No, that's not true. We're prepared to do up front alongside a deal that includes raising rates on upper income Americans included in those. We are prepared to do a meaningful amount of savings on the spending side, not just to avoid the damage of the sequester, but to help reduce the long-term deficits.
CROWLEY: But you want them -- you want them to come forward with the cuts.
GEITHNER: No, I think again in general we've laid out a detailed plan. We would be happy to look at an alternative plan, but they have to lay that out for us, both on the revenue and rates side, but also on the spending side. Again, that's just a reasonable way.
What we can't do is sit here and trying to figure out what works for them. They have to come tell us what works for them.
But, Candy, let's go to what's at stake in this context. This is something we can do. And I think we're going to get there, because there's too much at stake not to get there not just for the American economy, but for the world economy. And we have a chance to do something very good for the country now, very good for the country now. Again, not just protecting 98% of Americans from seeing an increase in their taxes, not just preventing the threat of default hanging over the country in the future, not just preventing deeply damaging spending cuts up front in this context, but doing something to create room to invest in infrastructure, strengthen the economy, get more people back to work and putting our long-term fiscal house in order. And that's what we're going to work towards.
Now there's no surprise. You're a pro at this.
GEITHNER: There's going to be a lot of political theater between now and when we get there.
CROWLEY: And is this a part of that political theater? Meaning your...
CROWLEY: You know, this is your opening gambit here. It's not -- you know you're not going to get what you went up there and put out there for Republicans.
GEITHNER: No, what we're trying to do -- and this is the only way I know how to do these things to solve problems is you have to be very clear and direct with people about what you want and what you need and what's important for the country, and that's what we did.
And in those proposals, no surprise. There are the things the president campaigned on. The country has had a chance to think about the merits of those proposals. They're overwhelmingly supported by the American people and the business community, and that's why we think that ultimately they're going to be the basis for an agreement.
CROWLEY: So the $50 billion in stimulus, let's take that, that's in there for roads and infrastructure, et cetera. If you don't get that, then no deal?
GEITHNER: Again, huge support in the business community for that.
CROWLEY: OK. But if you don't get that?
GEITHNER: Huge support. And it's good for the economy because, again, it makes the businesses more competitive, gets more Americans back to work. It's something we can afford. And those proposals we made to strengthen growth are things we pay for in this plan.
We show how to pay for it, how to make sure that we're using the savings from the wars, for example, to invest in things that are important to America. And, again, what we're asking people to do is to make a modest investment in making this country stronger.
CROWLEY: Right. And but again, you know where this is going. John Boehner, again, the speaker, said, we're at a stalemate. Is that how you would describe where things are?
GEITHNER: No, I think we're far apart still, but I think we're moving closer together. Again, remember...
CROWLEY: Where are you closer?
GEITHNER: Well, they -- the Republicans have said for the first time in decades, if I'm not mistaken, the leaders of the Republican Party, that they are prepared to raise taxes as part of a deal that helps reduce our long-term deficit.
Now what they haven't said to us is how far they're willing to go both on rates and revenues, and that's something we're going to need to see from them if we're going to have an agreement.
CROWLEY: But they've said no increase in rates. They've said that repeatedly. GEITHNER: Yes, but there's going to be -- but they know this. I mean, Candy, there's not going to be an agreement without rates going up. There's not going to be...
CROWLEY: So you'll go off the fiscal cliff in the Republicans say, sorry, no way are we going to raise rates for the -- on the wealthy? You guys are willing to go off the fiscal cliff?
GEITHNER: If Republicans are not willing to let rates go back up and we think they should go back to the Clinton levels, a time when the American economy was doing exceptionally well, then there will not be an agreement.
CROWLEY: So you would be willing to let that happen?
GEITHNER: And, again, let me explain why, again, if they are going to force higher rates on virtually all Americans because they're unwilling to let tax rates go up on 2 percent of Americans, then, you know, that's a choice we're going to have to make. But they'll own the responsibility for the damage to the American people.
CROWLEY: But it's kind of the choice that the country will have to pay for, correct? So is there some responsibility for you all? Like, you would let that happen, say, OK, fine, you guys don't want to do tax rates, we're out of this?
GEITHNER: Again, what we're trying to do is to get them to come together and join us in doing something that's good for the American economy. And we recognize that's going to require spending savings, not just revenue increases on the top wealthiest 2 percent of Americans. We recognize that...
CROWLEY: And you would like them to propose on the spending side. You would like to see what they want?
GEITHNER: Well, again, no, we proposed detailed proposals on both sides. If they want to go beyond that, then they should tell us what they would like to do. If they want to do it differently, they should tell us what they want to do.
CROWLEY: Whose turn is it? Where are we in this? GEITHNER: The ball really is with them now. And, again, they're in a hard place. And they're having a tough time trying to figure out what they can do, what they can get support from their members for. That's understandable. This is very difficult for them.
And we might need to give them a little more time to figure out where they go next. But...
CROWLEY: We don't have a lot of time.
GEITHNER: We don't have a lot of time. I agree. We can't wait very long. Again, what we are trying to do is be as clear as we can with what is essential to us and what we would like to have, what we think is good for the American economy, and what we need to hear from them now is, what do they think makes sense? CROWLEY: In terms of cuts, because you know what they think makes sense in terms of revenues.
GEITHNER: No, they haven't told us. They haven't told us yet what they want to do on revenues or on rates or even deduction limitations. There has been nothing from them on that except for a vague recognition, which we welcome, that rates are going to -- that revenues are going to have to go up. That's part of it, but that's just the...
CROWLEY: I mean, they've been pretty adamant on no rate hikes. But, I mean, my final question, because you're going to leave us at some point, I guess, after this -- you get this fiscal cliff thing is cleared up in some way, shape, or form.
When you look back over your four years here as treasury secretary, when you look back at the stimulus plan, the $7 trillion- plus, and where we are right now in the economy, in the economic recovery, is this honestly where you thought you would be when you started out trying to fix the economy you got?
GEITHNER: I think we're in a much stronger position today as a country than we were in '07 -- in '08 when the president came to office, a much stronger position.
CROWLEY: Sure, folks see that for sure. I just wonder if you think looking forward that this was where you thought we would be. Didn't you think we would be better off?
GEITHNER: And to me, I think we're in a much better position than actually I thought was realistic, in those darkest days of this financial crisis, when there was a real risk of catastrophic collapse, and I think all Americans can be much more confident today than any time in the last four, five, six years that we have a better foundation for broad-based growth than we had in -- and I'm proud of being part of that, even with all the challenges we have ahead.
CROWLEY: Mr. Secretary, thank you for joining us.
GEITHNER: Thank you. CROWLEY: Will Congress beat the clock on the fiscal cliff?
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