Geithner: Entitlement reform part of long-term fiscal health

Geithner told the panel that the government should look to build on the health care overhaul to bring down health care costs and that officials should “work together across party lines to strengthen Social Security for future generations.”

But the Treasury secretary was also pressed by Republicans on what some said was the administration’s lack of leadership on Social Security, Medicare and Medicaid and for the budget’s proposals on taxes and spending. 

“As I look through this budget proposal, I am left wondering if there wasn’t a printing error, because it looks almost identical to last year’s budget,” said Rep. Dave Camp (R-Mich.), the Ways and Means chairman, who estimated that the budget contained $1.9 trillion in tax increases.

Camp added that he was concerned that the White House plan did not tackle the big problems, despite warnings from the president’s own debt commission and others.

“I hoped for so much more and am left wondering, how many more experts need to ring the alarm bell before this administration hears it and acts accordingly?” Camp said.

The president’s fiscal year 2012 budget plan predicts it would reduce budget deficits by $1.1 trillion over a decade, with roughly a third of that coming from tax increases and two-thirds from spending cuts. The Ways and Means hearing also came as the House was debating a plan to slash spending by billions of dollars for this fiscal year.

At the hearing, Rep. Tom Price (R-Ga.) also told Geithner that there was no evidence that the administration was taking the lead in entitlement reform. 

Geithner responded that Congress and the president had already enacted the health care overhaul, which he said reformed entitlements in a way to contain costs – a point that Price disputed. 

As for Social Security, the secretary said in his prepared statement that the administration would look to work with Congress to shore up the program long-term.

“However, we will reject plans that slash benefits; that fail to protect current retirees, people with disabilities and the most vulnerable; or that subject Americans’ retirement savings to the whims of the stock market,” Geithner said. 

Several Republicans on the panel also questioned Geithner about a variety of tax initiatives in the budget, including proposals to take tax breaks away from the oil-and-gas industry and to allow the Bush tax cuts to expire at the highest income brackets at the end of 2012. Some lawmakers worried that tax changes would hit businesses that pay taxes as individuals. 

“Those tax increases are dead on arrival in this house,” said Rep. Kevin Brady (R-Texas) “We’ve got to find a better way to work together with you to get this economy moving.”

But the Treasury secretary countered that the number of businesses that would be hit by the change to the Bush tax cuts would be in the 2 percent to 3 percent range – and that most of those were law or investment firms.

Generally speaking, Democrats on the panel were complimentary of the president’s budget, even as some of their colleagues railed against certain proposals, such as the plan to cut energy assistance for the poor. 

Geithner, Camp and other lawmakers also continued to express interest in working together on overhauling the tax code, with the Treasury secretary ending his appearance before the panel by saying “let’s see what we can do on tax reform.”