WASHINGTON (Associated Press) — Treasury Secretary Tim Geithner said that allowing tax cuts for the wealthy to expire would be "the responsible thing to do."
This is the last year for the tax cuts enacted under President George W. Bush. Republicans have generally favored extending all of them. While Democrats are divided on the issue, President Barack Obama has favored allowing the expiration of cuts he says have applied to the wealthiest people.
"It's responsible to let the tax cuts expire that just go to 2 percent to 3 percent of Americans, the highest earning Americans," Geithner told ABC's "This Week" in an interview broadcast Sunday.
Doing so would show the world that the U.S. is "willing as a country now to start to make some progress" reducing long-term budget deficits, he said.
Geithner said he does not believe that higher taxes for those high earners will hurt economic growth.
He also said he "absolutely" believes Congress will act on taxes before the election. That's a touchy issue for Democrats, some of whom may not be eager to address a hot-button issue like taxes so close to Election Day.
Speaking on NBC News' "Meet the Press," Geithner says he supports allowing the top capital gains tax rate to revert to 20 percent. It's 15 percent now.
He also addressed the future of Fannie Mae and Freddie Mac, the mortgage buyers whose bailout has cost taxpayers $145 billion so far. The financial overhaul didn't address their future. The Obama administration has said it wants to wait until next year to determine their future.
"I think we're not going to preserve Fannie and Freddie in anything like the current form," Geithner said on "Meet the Press." "We're going to have to bring fundamental change to that market."