Treasury Secretary Timothy Geithner said Tuesday that a deal to raise the legal debt limit, which he expects to be completed in the next few weeks, will be only a short-term “down payment” on solving the nation’s debt problem, and that it would be “irresponsible” to reduce the massive federal deficit anticipated over the next ten years with spending cuts alone.
What is needed, he said, is a longer-term deal on a “balanced framework” that includes “revenue increases through tax reform.”
In the vernacular, when the government changes the tax laws to extract more tax revenue from citizens it is called a tax increase.
“I think it’s very likely we’re going to do this thing in two stages over the next few months,” he explained.
“In that room,” said Geithner of the debt-limit negotiations, “you have people focused on the overwhelming pragmatic imperative of how to legislate–meaning get the votes–to legislate a comprehensive, long-term fiscal consolidation program that allows us to go back to living within our means, recognizing that we are not going to be able to agree in the next few weeks about ultimately what we’re going to have to do to make our longer-term entitlement programs more sustainable, what mix of reforms on Medicare and Medicaid are ultimately going to be necessary and we’re not going to resolve in the next few weeks the precise shape of tax reform, not feasible.”