Geithner: Renewal of tax cuts for wealthy unlikely

Treasury Secretary Timothy F. Geithner said Sunday that the Obama administration’s upcoming stimulus plan likely will not renew Bush-era tax cuts and that the changes will not slow the already struggling economy.

“I do not believe they will be [included] and shouldn’t,” he said on the Sunday-morning talk shows. “I don’t believe they will have a negative effect on growth.”

The cuts expire for Americans making roughly $200,000 annually, or about 2 percent to 3 percent of U.S. workers.

“The fair thing is keeping in place and preserving the cut to 95 percent of Americans,” Mr. Geithner said on NBC’s “Meet the Press.” “The economy can withstand that.”

Mr. Geithner also said he thinks that Congress will act on the tax issue before the November elections and that the administration’s stimulus efforts will still include tax benefits and other incentives for small businesses.

He also acknowledged that the government needs to move away from a stimulus plan that focused on recovery and public works projects to one that is “led by the private sector.”

Mr. Geithner defended the administration’s efforts, pointing to jobs growth over the past six months despite high unemployment. He said businesses are making money but remain skittish because of the severity of the recession, which started in December 2007.

Though he called upon the private sector to help, including more hirings, Mr. Geithner said that the administration still has unspent stimulus money and that its new stimulus plan is expected to include more help for the unemployed, money to keep teachers in classrooms and help for small-business owners.

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