WASHINGTON Nov 16 The U.S. Treasury Department
does not have the authority to delay the tax increases that will
take effect at the end of the year if the White House and
Congress are unable to stave off the "fiscal cliff," Treasury
Secretary Timothy Geithner said on Friday.
The law "does not give me the authority to give them, to let
them avoid making some decisions on rates and policy," Geithner
said on Bloomberg TV's "Political Capital with Al Hunt," when
asked whether he could freeze the income tax withholding rates
if Washington was close to averting the year-end fiscal crisis.
Some $600 billion in spending cuts and tax hikes will start
taking effect Dec. 31 -- a combination of austerity measures
known as the "fiscal cliff" that could tip the country into
recession if lawmakers fail to act.
Some analysts believe the Treasury has discretion to hold
back issuing new tax withholding tables if it believes a deal
stopping tax changes is in the offing.
But Geithner said: "Don't look to that as a solution to this
Two years ago, the nation was gripped by a similar
situation, with a down-to-the-wire congressional fight over
extension of the Bush-era tax rates for the wealthy. A deal was
not reached until mid-December.
The Obama administration has just over six weeks to broker a
deal with Congress to avoid the fiscal cliff and is pushing
Republican lawmakers to allow the tax cuts for the wealthiest to
Earlier on Friday, Geithner and President Barack Obama
started negotiations with Congressional leaders on what appeared
to be a promising note.
"You heard each of the leaders say coming out that it was a
very constructive meeting," said Geithner.
"They said what you'd hope for them to say at this point,
which is that 'this is something we can do, we're committed to
do it, we want to do it as soon as we can, we know the stakes
are very high,'" he said.
As part of the negotiations, the administration is using its
most recent budget proposal as its deficit reduction plan, which
includes raising more than $1.5 trillion in new revenue over the
next 10 years.
The massive spending cuts and tax hikes will coincide with
when the country is expected to hit the debt ceiling, or the
legal amount it is allowed to borrow.
Geithner is expected to remain as Obama's Treasury chief
through mid-January. When asked whether he would stay until the
administration cut a deficit reduction deal, Geithner said: "I'm
very confident that we're going to get enough done in these next
few weeks and that (Obama's) going to have a successor in place
so I'll be able to go off and do some other things."