U.S. warns against kicking fiscal crisis down the road
WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner on Tuesday warned against extending all the U.S. tax breaks to give Washington additional time to broker a deficit reduction deal, saying it would create more uncertainty in the markets.
Seven weeks are left for the Obama administration and Congress to deal with the so-called fiscal cliff, or $600 billion worth of tax hikes and spending cuts that will go into effect next year and may trigger a recession if Washington does nothing.
With lawmakers and the White House bickering over how to put the country on a sustainable fiscal path, a number of lawmakers and think tanks have argued for more time.
"That will leave all the uncertainty you don't like on the table," said Geithner at an event sponsored by the Wall Street Journal, in his first public comments on the looming fiscal crisis since U.S. President Barack Obama won re-election last week.
Earlier, Geithner and Obama met with leaders from the country's biggest labor unions and liberal groups where Obama repeated his campaign promise to raise taxes on the wealthiest and hold tax rates down for those earning below $250,000, according to attendees.
At the event, Geithner said it was not feasible to reduce the deficit over the long term without additional revenues.
"If you believe ... we shouldn't be asking middle class Americans to pay more in taxes, then I don't see how you do this without higher rates," said Geithner, who is expected to stay into early next year to help the White House negotiate with Congress.
Obama has made an effort to reach out to congressional leaders since winning re-election and on Friday will meet with top Democratic and Republican lawmakers to start budget negotiations.
(Reporting by Rachelle Younglai, editing by Gary Crosse and Prudence Crowther)
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