Sec. Geithner: Ready to Go Over 'Cliff' if Necessary
Treasury Secretary Timothy Geithner says the Obama administration is "absolutely" ready for the economy to go over the "fiscal cliff" rather than accept a budget deal that doesn't include higher taxes for top earners.
Geithner says the administration thinks budget deficits are so large that they can't be closed without boosting tax rates on the wealthiest 2 percent of Americans.
He also says in an interview on CNBC that the administration would reject a budget plan that didn't include an increase in the federal borrowing limit. That limit is expected to expire early next year.
Geithner says he still thinks progress is being made in the budget negotiations and that the outlines of an agreement are becoming clearer.
"They look inevitable," he says.
President Barack Obama and House Speaker John Boehner discussed the fiscal cliff Wednesday in a telephone call. It followed several days of political sparring over steps to prevent a year-end series of tax increases and spending cuts.
The call raises the possibility that negotiations will soon resume between the White House and congressional leaders.
Obama is demanding that Republicans agree to raise tax rates at upper incomes as part of a deal to rein in future deficits. GOP leaders say they will agree to higher revenue, but they want to close loopholes or reduce tax breaks rather than raise rates.
A spokesman for Boehner disclosed the call.
An administration official says President Barack Obama will travel to Detroit Monday to push his proposal for raising tax rates on wealthier Americans.
The trip is part of Obama's effort to get public backing for his positions and use that support to pressure Republicans to reach a deal on the "fiscal cliff." The president says there can't be a deal until GOP lawmakers drop their opposition to increasing rates on the top 2 percent of income earners.
Obama launched his public appeal during a trip to Pennsylvania last week.
The official requested anonymity in order to discuss the trip before it is publicly announced.
Meanwhile, the top Republican negotiator in talks with President Barack Obama on avoiding economy-jarring tax increases and spending cuts says it's time for the White House to respond to Monday's GOP offer.
House Speaker John Boehner says that "we can't negotiate with ourselves." The GOP plan mixes $800 billion in higher tax revenue with cuts to Medicare and a stingier cost-of-living adjustment for Social Security benefits.
The White House has dismissed the GOP plan since it fails to raise the top two tax brackets for upper-income earners -- a core campaign promise of Obama's and a central demand in the current talks. So far, Republicans say that is a step they're unwilling to take. (AP)