Geithner: GOP tax policies a ‘$700 billion fiscal mistake’
WASHINGTON Ã¢â‚¬â€ Treasury Secretary Timothy Geithner took up the role of political attack dog Wednesday, lambasting Republican tax policies as a “700 billion dollar fiscal mistake.”
In a rare partisan jab, Geithner assailed Republicans for backing tax cuts for “the top two percent” of US earners, a policy he said would punch a hole in government budgets for the next decade.
“Borrowing to finance tax cuts for the top two percent would be a 700 billion dollar fiscal mistake,” Geithner told the center-left Center for American Progress in Washington.
“It’s not the prescription the economy needs right now, and the country can’t afford it.”
Republicans have called for President Barack Obama to keep the cuts in place to stimulate spending and aid the fragile economic recovery.
But Geithner said the measures — first introduced by president George W. Bush — made no economic sense and must be allowed to lapse at the end of the year.
The issue has been sparred over by Republicans and Democrats as they head to mid-term elections this November.
The White House and Geithner are battling to convince Americans their economic policies have prevented a repeat of the Great Depression and that the recovery is on track.
In an effort to win that argument, Geithner heaped blame on former president Bush for upending the “sound” economic policies of his predecessor Bill Clinton.
“Over the past two decades, Washington provided the country with a useful lesson in the consequences of two very different approaches to economic and fiscal policy.”
He accused opponents of having “abandoned the basic disciplines of budgeting, and borrowed to finance expensive tax cuts skewed towards the most affluent.
“We are living today with the damage caused by those choices.”
Geithner also said that retaining middle class tax cuts would be “essential” to keep the US economic recovery on track.
“If the middle class tax cuts are not extended, Americans will face a sharp increase in taxes and a sharp fall in disposable income.”
“This would be irresponsible and it would be unfair, especially with America still suffering through the effects of what we learned last week was the worst recession in post-war history.”
His comments were dismissed by blogger and former Bush White House economic advisor Keith Hennessey.
“It’s disappointing to see this from Secretary Geithner, whom I see as the least partisan member of the Obama economic team,” Hennessey said.