Geithner suggests letting tax cuts expire for nation's wealthiest Americans

Tax cuts save more than $2,000 per year for a typical middle-class family, he said. 

Republicans and a couple of Democrats, so far, are calling for an extension of all the tax cuts while the economy is still working its way out of the protracted recession. 

Geithner called the move a "$700 billion fiscal mistake," and said "the country can’t afford it."

President Obama has suggested raising taxes on individuals making more than $200,000 a year and couples making more than $250,000. 

Sen. Evan Bayh (D-Ind.) said there has been talk among Democrats of raising those limits to $1 million, he today during an interview on MSNBC.

Geithner emphasized that a temporary extension of the Bush-era tax cuts from 2001 and 2003 would not mean they would become permanent. 

"The world is likely to view any temporary extension of the income tax cuts for the top two percent as a prelude to a long-term or permanent extension," he said. "That would hurt economic recovery by undermining confidence that we are prepared to make a commitment today to bring down our future deficits."

He touted the stimulus as the "best mix of pro-growth policies" and said it was "very powerful" in helping the slumping economy regain its strength. 

Sound fiscal policies throughout the 1990s led to a budget surplus that helped the middle class and contributed "to a period of strong growth and job creation, led by the private sector, with broad gains in income for all Americans," he said. 

After that, Geithner said, "Washington changed course, abandoned the basic disciplines of budgeting, and borrowed to finance expensive tax cuts skewed towards the most affluent, and a significant expansion of Medicare."

Those changes resulted in a "huge increase in our debt burden, relatively slow job growth, and stagnation in incomes for the middle class."

"We are living today with the damage caused by those choices," he said. "And as we start a new decade, we have compelling evidence of what works for middle-class Americans and for Main Street businesses — and what doesn't."

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