Geithner Calls for a "Go Smart" Approach
In an interview with Charlie Rose at the Clinton Global Initiative's annual meeting, Treasury Secretary Timothy Geithner endorsed a "Go Smart" approach to the fiscal cliff and deficit reduction more broadly. First, he said that simply waiving all the policies in the fiscal cliff, even for a short amount of time, would not be a viable solution because of the message it would send to the public.
That means Congress is going to put off again any meaningful action to make the economy stronger, any meaningful action to give confidence to people that we're going to go back to living within our means. And why would people be confident...that they're going to negotiate seriously and try to replace this mix of tax increases and spending cuts with something more sensible?
He also said that the fiscal cliff was a great opportunity to enact a plan that tackled both taxes and spending and contained elements to help growth in both the short term and longer term.
I think people look at this fiscal cliff with unease, which is understandable given their lack of confidence in the political system, but it's a really good opportunity for us....The magnitude of the changes we have to undertake as a country...are things we can manage. If you do it right, if it's balanced, if the burden is spread fairly, and again if you're doing things that help growth at the same time like infrastructure or investment in research and development or education, things like that, then these are manageable challenges for the United States and much more modest challenges than what you see countries around the world do to put their fiscal houses in order.
Geithner went on to argue that entitlements on both the spending and tax side were unsustainable, and that dealing with both in the context of entitlement and tax reform was the best way to go. He also said that deficit reduction was more than just about numbers and that policymakers should look to improve programs and the tax code instead of just cutting spending and raising taxes.
Secretary Geithner's endorsement of a Go Smart approach to deficit reduction is encouraging. We hope that the Administration and Congress are able to agree to a plan that takes that to heart.