Treasury Secretary Timothy Geithner said Sunday that tax increases may be on the horizon as the administration tries to fight the rising budget deficit. Both Secretary Geithner and National Economic Council Director Larry Summers dodged questions about raising taxes on the middle class, indicating that it might be a possibility despite President Obama’s campaign promises to the contrary.
“It is never a good idea to absolutely rule things out, no matter what” Summers said at a Sunday interview on “Meet The Press.” This seems to run counter to Obama’s repeated campaign promise that his administration will not let the taxes of the middle class increase by “a single dime.”
Summers attributed the shift to concessions forced by healthcare reform, saying that the funding has to come from somewhere. The Obama administration has promised to pass healthcare reform without increasing the federal deficit; a promise that is increasingly difficult to make without increasing taxes on a larger income pool.
Secretary Geithner has linked healthcare reform to restoring the economy, saying “If we want an economy that’s going to grow in the future, people have to understand we have to bring those deficits down. And it’s going to be difficult, hard for us to do. And the path to that is through health care reform.”
Geithner is vague on what healthcare reform will mean for America’s middle class, saying “We’re not at the point yet where we’re going to make a judgment about what it’s going to take.”
Despite the budgeting challenges faced by the administration, the economy seems to be on the road to improvement. Former Federal Reserve Chairman Al Greenspan said this Sunday that “he was pretty sure we’ve already seen the bottom” of the recession. This came on the tail of a government report released Friday indicating that the economy is slowing its decline and may be on the road to recovery.
Employment doesn’t seem to be on the rise however. “We maybe are beginning to see the end of the recession, but it’s still going to be some time before we are seeing companies hiring again. That’s usually the last thing that happens,” Obama cautioned in an interview Sunday.
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