Treasury Secretary Tim Geithner said Friday that he thinks a deal to avert the so-called fiscal cliff is possible within the next “several weeks,” hours after he was involved in a meeting with President Barack Obama and top Congressional leaders.
Geithner also told Bloomberg’s Al Hunt that it would be a “mistake” to keep the Bush tax cuts in place for another six months to a year, because it would leave little to no confidence in any deal ever getting done.
“You know, we’ve had several periods now where there was a choice made to defer,” Geithner said. “And if this political system again, with all that’s at stake for America, decides to defer again, in the hopes that Americans will give us more time to come together, I think it would be a mistake.”
“I think you leave – you leave this huge cloud of uncertainty hanging over the economy. And more importantly, perhaps, you reduce the incentives both sides now have to come together.”
Geithner said that the uncertainty surrounding the deal is already causing confidence in the economy to decline — and he warned that it could get worse if a deal doesn’t happen in the lame-duck session of Congress.
HUNT: Let’s assume you don’t get there. I know you’re optimistic, but would you worry, as Michael Duke, the CEO of Wal-Mart does, that, boy, if we hit three weeks from now and there’s no agreement, that’s really going to affect consumers at Christmastime, that’s going to have a blow?
GEITHNER: Well, I very much agree, that I think the uncertainty right now about whether this’ll be resolved on sensible terms, whether our middle-class families see their taxes go up, already is having an effect on consumer confidence and the economy, and that will –
HUNT: So to affect the Christmas season, when do you have to get –
GEITHNER: You’d want to do it as soon as you can. And –
HUNT: But when, two weeks?
GEITHNER: Well, I think if you – I think this is doable within several weeks, I think so.
HUNT: OK. OK.
GEITHNER: And the sooner, the better in this – just for the reason you said, and I think it’s good you reference those comments. Remember, his customers are the average American.
Here’s video of Geithner talking about the mistake to defer:
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