(CNSNews.com) – Senate Majority Leader Harry Reid said that tax rates on wealthier Americans must go up or the country will go over the fiscal cliff, a move that could cause a recession next year.
“We have kicked the can down the road for far too long, we’re not going to do it anymore,” Reid said at a Capitol Hill press conference Thursday after CNSNews.com asked him whether he would accept a recession if Republicans refused to raise taxes.
“The American people need certainty, [and] the only way to have that certainty is to make sure that we start paying for things – and one way to do that is to have the richest of the rich pay a little bit more.”
Both the Federal Reserve and the Congressional Budget Office have said that if Congress allows the fiscal cliff scenario to occur – a combination of higher taxes on all Americans and about a $1 trillion spending cut – the resulting economic shock will likely result in a recession early next year, followed by rising unemployment.
Reid said that both President Obama and Democrats had been “very clear” that unless Republicans agree to raise taxes on those making more than $250,000 per year, there would be no deal, and the fiscal cliff scenario would occur – with all of its intended results.
“The president’s been very clear. He’s been very clear, I’ve been very clear. Republicans have to make sure that they allow the rate increase to take place.”
The White House has said repeatedly that it would not accept anything less than a tax increase on wealthier Americans, stating that they would allow the fiscal cliff to happen if a tax increase is not agreed to.
“Again, there's no prospect in an agreement that doesn't involve the rates going up on the top two percent of the wealthiest,” Treasury Secretary Timothy Geithner told CNBC Sunday.
Geithner said if that happened, the pain of the fiscal cliff would be felt by all.
“To – to go over this fiscal cliff, and because Republicans won’t raise taxes, tax rates on the wealthiest two percent of Americans, would subject the average American to big tax increase and enormous damage from the other cuts that would happen in that context.”