With Dec. 31 rapidly approaching, lawmakers could be tempted to punt on an agreement to deal with the looming year-end threats of tax hikes and spending cuts known as the fiscal cliff. That’s a bad idea, Treasury Secretary Tim Geithner said Tuesday.
“I know there are people out there who say, ‘Look, it’s November 13. The end of the year approaches. Why don’t you just put off all the stuff to buy yourself some time? Why don’t you just extend everything?’” Geithner said at a meeting of The Wall Street Journal CEO Council in Washington, D.C. “I would discourage you from viewing that as an attractive alternative for dealing with this.”
The Treasury secretary said that doing so would both leave the U.S. economy in its current state of uncertainty over its fiscal future, and apply a new layer of uncertainty on top of that: Whether there would ever be an incentive for anyone to come to the table to make a deficit deal that is sure to involve compromise.
“If you say again… we’re going to extend and delay, what gives people confidence that people who have to negotiate this will come to the table and negotiate?” he added. “Because they’ll always believe if they hold out they can just extend again.”
“Be careful about those who argue for and urge for, let’s just extend [the cliff provisions] while we debate, while we negotiate,” he said.
One such person is House Speaker John Boehner of Ohio. Boehner told National Journal in an interview earlier this month that he expected “some type of a bridge” rather than a grand bargain to avoid the fiscal cliff during the lame duck.
“Lame ducks aren't noted for doing big things. And frankly I'm not sure that lame ducks should do big things. So the most likely outcome would be some type of a bridge,” Boehner said in the pre-Election Day interview. “But the impact of the election is certainly going to have an impact on how this plays out.”
Geithner also reiterated in Tuesday’s wide-ranging interview with The Wall Street Journal’s David Wessel at the CEO event that he expected to leave his post at Treasury around Inauguration Day, which is scheduled for Jan. 21, 2013. The Obama administration has yet to name a replacement but is expected to do so soon.