By Justin Sink and Russell Berman - 11/16/12 09:43 PM EST
Treasury Secretary Tim Geithner said Friday that he believed a budget deal could be accomplished "within several weeks" and stated that the tone of a meeting with congressional leaders was "very good."
But the Treasury secretary admitted that negotiators "have the hard stuff ahead" and seemed to shoot down the idea that a temporary stay of current tax rates could give Congress more time to strike an agreement.
That seemed to knock down a proposal, advocated for by Speaker John Boehner (R-Ohio), that would have extended the existing tax rates for the wealthiest while determining a set amount of new tax revenue to be obtained.
Republicans are hoping such a plan would allow them to find the revenue streams through closing deductions for the wealthiest Americans rather than raising rates back to pre-Bush-era levels. But Geithner warned that leaving such uncertainty could hamper economic growth.
"I think you leave … this huge cloud of uncertainty hanging over the economy," Geithner said. "And more importantly, perhaps, you reduce the incentives both sides now have to come together."
Geithner also said it was important to "lock in upfront enough savings so that people believe there's going to be meaningful change ahead."
Earlier Friday, Boehner’s office said the Speaker “formally offered” to the president a framework for a two-step process along the lines of what he presented in a public speech the day after the elections.
“He said Republicans recognize neither side is going to get everything it wants, and noted Republicans have put revenue on the table to demonstrate their seriousness about finding common ground,” a Boehner spokesman said in a readout of the meeting.
Under the Speaker’s framework, the White House and congressional leaders would use the next several weeks to agree to specific “targets” for revenue and savings through entitlement reforms. Boehner has said repeatedly that tax and entitlement reforms are too complex to complete this year, and he reiterated that in the meeting.
“Once we settle on those targets, the Speaker proposed, we can create simple mechanisms, in statute, that would achieve those revenue and spending goals,” Boehner’s office said. “They would be in place unless or until more thoughtful policies replace them.”
But House Minority Leader Nancy Pelosi (D-Calif.) said Friday she thought a deal should be completed "well before Christmas, so that we're not up to the end of the line."
Geithner is also likely eager to complete a deal by January, when he is set to resign from the president's Cabinet.The Treasury secretary said he was "very confident" an agreement would be met by then, and refused to entertain questions about if he would continue on were a temporary extension to be implemented.
"I'm very confident that we're going to get enough done in these next few weeks and that he's going to have a successor in place so I'll be able to go off and do some other things," Geithner said.