Geithner said Obama decided to “give them the best compliment we could” by including some reforms in an April Obama speech, September supercommittee recommendations and the 2013 budget.
He said that the Obama budget has more concrete Medicare and Medicaid reforms than Simpson-Bowles and goes deeper on non-defense discretionary cuts.
Geithner was responding to questions by Sen. Kelly Ayotte (R-N.H.), and at one point turned the tables on her. He asked Ayotte if, given her “affection” for Bowles-Simpson, she would support its tax reform that raised trillions in revenue for deficit reduction.
“Are you willing to embrace the broad balance of Bowles-Simpson? Then there is a lot to talk about,” he said
Geithner faced the same tough questions that dogged White House acting Budget Director Jeff Zients in his debut appearance before the Senate Budget Comittee. Ranking member Jeff Sessions (R-Ala.) repeatedly tried to get him to admit that in absolute dollar terms the budget would over 10 years spend more than would be the case under current law.
Sessions argued that because the administration is replacing $1.2 trillion in automatic cuts that resulted from the failure of last year's supercommittee with a mixture of tax increases and spending cuts, the budget is a spending increase.
Geithner did not answer yes or no, and instead repeatedly said that measuring spending against the size of the economy is more accurate. Such a measure factors out inflation.
“The savings that we proposed if enacted by the Congress will reduce deficits to below 3 percent of GDP,” he said. He said that this level would stabilize the growth of the national debt.
“You are right that, and I commend you for it, in saying that even if Congress were to enact this budget, we would still be left with, in the outer decades as millions of Americans retire, what are still unsustainable commitments in Medicare and Medicaid,” he added. He said the Obama budget if enacted would give the parties time to come together on a bipartisan solution.