ByÂ Matt Cover
(CNSNews.com) – Treasury Secretary Timothy Geithner said Tuesday that a deal to raise the legalÂ debt limit, which he expects to be completed in the next few weeks, will be only a short-term â€œdown paymentâ€ on solving the nationâ€™s debt problem, and that it wouldÂ be “irresponsible” to reduce theÂ massive federal deficit anticipated over the next ten yearsÂ with spending cuts alone.
What is needed, he said, is a longer-termÂ deal on a â€œbalanced frameworkâ€ that includes â€œrevenue increases through tax reform.â€
Geithner said negotiations with Congress overÂ such aÂ longer-term plan could be completed within the â€œnext few months.â€
In the vernacular, when the government changes the tax laws to extract more tax revenue from citizens it is called a tax increase.
â€œI think for it to work for the economy you need to have a balanced framework,â€ Geithner told a Washington, D.C. gathering of CFOs from major corporations.
â€œIf you try to do this, the magnitude of deficit reduction we need–and we need about $4 to 5 trillion in deficit reduction over the next ten years–to try to do that only on spending cuts in parts of the budget would be irresponsible and really not achievable politically,â€ said Geithner. “You can’t pass the budget without that.
â€œSo, you need a balanced plan that has modest revenue increases through tax reform as well as some near-term spending savings and long-term entitlement reforms,â€ he said.
â€œAgain, I think if you look at the structure of our budget and what is drivingÂ these long-term deficits, if you look at the scale of challenges we need in terms of creating some room for investing in things that matterÂ for long-term growth,Â you canâ€™t do it through spending reductions concentrated in a very narrow slice of the government where the economy sort of depends on the government doing things that only the government can do,â€ said Geithner.
The national debt is now $14.34 trillion. This year, according to the Congressional Budget Office, the federal government will run a deficit of $1.4 trillion. Over the next decade, according to the CBO, the budget proposed by President Barack Obama would run up deficits totallling $9.5 trillion.
To read more, visit:Â http://www.cnsnews.com/news/article/geithner-calls-revenue-increases-through
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