No New Recession

WASHINGTON (Reuters) - The economy is not likely to slip back into recession but letting tax cuts for the wealthiest Americans expire is necessary to show commitment to cutting budget deficits, Treasury Secretary Timothy Geithner said on Sunday.
In appearances on several Sunday talk shows, Geithner said only 2 to 3 percent of Americans -- those making $250,000 or more a year -- will be affected when tax cuts enacted under former President George W. Bush end on schedule this year.
Republicans want to extend the tax cuts and Democrats are divided but Geithner said reductions for top earners should end.


"We think that's the responsible thing to do because we need to make sure we can show the world that (we're) willing as a country now to start to make some progress bringing down our long-term deficits," he said on ABC's "This Week" program.
Geithner played down fears that a slow-paced recovery might slide into a double-dip recession. He told NBC's "Meet the Press" he did not expect that to happen, although recovery from the deep recession that followed the 2008-2009 financial crisis will be prolonged.
STRENGTHENING, BUT SLOWLY
"I think the most likely thing is you'll see an economy that gradually strengthens over the next year or two, you'll see job growth start to come back, investments expanding ... but we've got a long way to go still," Geithner said.
The Obama administration has said it wants to keep tax cuts in place for Americans earning less than $250,000 a year. Some Republicans say letting any of the tax cuts expire is effectively a tax hike that may hurt recovery.
Geithner disagreed, saying it was more important to aim tax cuts at lower-earning Americans and businesses.
"Just letting those tax cuts that only go to 2 percent to 3 percent of Americans, the highest-earning Americans in the country, expire I do not believe it will have a negative effect on growth," he said on ABC.