Geithner Won't Rule Out Tax Hike

Treasury secretary says administration has to make "hard choices"

By Emily Feldman
|  Sunday, Aug 2, 2009  |  Updated 11:47 PM PDT
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The Week That Was: Bo-tax, Breakups and Brews

AP

Britain's Chancellor of the Exchequer Alistair Darling, right, is seen as U.S. Treasury Secretary Timothy Geithner, center, talks with Guillermo Ortiz, Governor of the Central Bank of Mexico, left, at the G20 Finance Ministers meeting at a hotel near Horsham, England, Saturday, March 14, 2009. (AP Photo/Kirsty Wigglesworth)

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Treasury Secretary Timothy Geithner and another member of President Obama's economic team said more steps are needed to revamp the economy and refused to rule out the possibility of a tax hike.

Appearing on ABC's "This Week," Geithner said the Obama administration would need to make "hard choices" to help curb the swelling economic deficits in the wake of the recovery effort but the Treasury Secretary wouldn't elaborate on what those choices will be.

"We have to bring [deficits] down to a level where the amount we're borrowing from the world is stable at a reasonable level," he said.  "And that's going to require some very hard choices."

Geithner said the administration would have to do "what's necessary" in order to pump life back into the economy by reducing the federal deficit.

"Well, we're going to have to look at – we're going to have to do what's necessary," he said.

The Treasury Secretary said it was too premature to make a decision about how the administration would deal with reviving the economy

"Again, we're not at the point yet where we're going to make a judgment about what it's going to take," he said. "I think what the country needs to do is understand we're going to have to do what it takes, we're going to do what's necessary."

Geither, who said the Obama administration inherited a $1.3 trillion debt from the Bush Administration, said the government will respond to filling the country's financial hole "in a way that does not add unfairly to the burdens that the average American already faces."

National Economic Council Director Larry Summers also said Sunday that President Obama would not dismiss out of hand raising taxes on middle-class Americans.

"There is a lot that can happen over time," Summers said on NBC's "Meet the Press."

He added: "It is never a good idea to absolutely rule things out, no matter what."

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