Geithner urges quick resolution of tax cut issue

Treasury Secretary Timothy Geithner said Tuesday the administration remains opposed to a permanent extension of tax cuts for the wealthiest Americans, something strongly favored by Republicans.

He said it is critical for Congress to resolve the issue before the end of the year.

Geithner said that the administration wanted to see a permanent extension of the 2001 and 2003 tax cuts for families making less than $250,000 annually. He said a permanent extension of tax cuts for households making above that amount would be very expensive.

But during an appearance at a forum for corporate executives, Geithner seemed to leave the door open for a temporary extension of tax cuts for the wealthy.

Geithner said it was important to resolve the issue before the tax cuts are set to expire on Dec. 31.

"It has to be done," Geithner said during his appearance before a business forum sponsored by the Wall Street Journal. "It is very important for Congress to act on this before they leave town. ... It would not be a responsible act of government to leave this level of uncertainty hanging until next year."

Congress returned this week for a lame-duck session following the November elections. One of the biggest agenda items is what to do with the tax cuts approved during the Bush administration in 2001 and 2003 which are set to expire on Dec. 31.

Geithner said the administration would approach the upcoming debate using the guiding principles of what is best for economic growth and the middle class.

He said he believed the dispute can be worked out fairly quickly and it was important to do so to resolve economic uncertainty.

On a separate issue, Geithner said that there was a big debate going on currently inside China over how fast to allow its currency rise in value.

"China is letting its currency rise and it is rising very gradually," Geithner said. "They are very adverse to a precipitous large move (in the value of their currency) which I understand."

Geithner said it was important that China's currency continue to rise in value not only to deal with imbalances in the global economy but also to deal with rising inflation pressures inside China.