The White House is "absolutely" prepared to go over the so-called "fiscal cliff" should negotiations with Republicans fail to muster a deal that would prevent a devastating series of tax hikes and spending cuts from triggering Jan. 1, Treasury Secretary Timothy Geithner said today.
Geithner, whom President Obama assigned to be the point person on his "fiscal cliff" proposal, told CNBC in an interview that an agreement won't be reached by year's end unless the GOP concedes an increase in tax rates for the top two percent of wealthiest Americans. Disparity over whether to extend the Bush-era tax cuts for all Americans or only those making less than $250,000 a year has barricaded any headway on a plan for months.
"Oh, absolutely," Geithner said when asked whether the White House is readying for the possibility of going over the "cliff."
"There is no prospect (for) an agreement that doesn't involve rates going up on the top 2 percent of the wealthiest Americans," Geithner said. "What we need to see is have them acknowledge that they are prepared to see rates go up. And if they are willing to accept that, and commit to that as part of an agreement, then we think we can do something really good for the American economy."
Though White House press secretary Jay Carney assured the same optimism that a deal can be reached as Geithner expressed earlier this week, he acknowledged the administration is preparing for the possibility of going over the "cliff." The Office of Management and Budget, he said today during his daily briefing, "issued a request to federal agencies" for information to finalize the sequestration cuts.
But, Carney qualified, "The administration remains focused on reaching agreement, as we've been discussing, on a balanced deficit-reduction plan that avoids sequestration."
"This action should not be read... as a change in the administration's commitment to reach an agreement and avoid sequestration," he continued. "OMB is simply ensuring that the administration is prepared, should it become necessary to issue such an order. OMB will continue to consult with agencies and will provide additional guidance as needed. This is just acting responsibly because of the potential for this happening."
An aide to John Boehner confirmed to CBS News that the House Speaker spoke with Mr. Obama on the phone this afternoon, but would not disclose details.