WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner on Tuesday said economic growth would be hurt by the year-end expiration of all the tax cuts enacted under President George W. Bush, along with automatic federal spending cuts also set to take effect.
But Geithner told the Senate Finance Committee that there would be only a “modest” impact on growth under President Barack Obama’s proposal to extend most of Bush tax cuts, except those for the wealthiest two percent of Americans.
“The president is proposing to extend the bulk of those tax cuts,” Geithner told the committee one day after Obama proposed a $3.8 trillion budget plan to Congress.
Lower tax rates set during the Bush years on all individuals will expire at the end of the year. In January, more than $1 trillion in spending cuts will be triggered in most government programs unless lawmakers agree on a deal to cut the deficit.
Reporting By Kim Dixon; Editing by Kevin Drawbaugh and Sandra Maler