Editor’s note: Also watch part one of the interview, Exclusive: Treasury Secretary Tim Geithner on Renewed Economic Confidence
TOM HUDSON: Now when it comes to jobs, the treasury secretary of the United States
says infrastructure investment and promoting U.S. products overseas are key
to adding more workers to American payrolls. That’s what Timothy Geithner
told NBR’s Darren Gersh in an exclusive interview in Fort Worth, Texas,
Darren also asked the secretary about why the Obama administration is
focused on corporate tax reform when several income tax provisions, like
the payroll tax cut, are due to expire at the end of the year.
TIMOTHY GEITHNER, TREASURY SECRETARY: Both are exceptionally
important, and tax reform is going to have to come because the tax system
we have today is really unfair, and it makes us less strong, less
competitive as a country, and you need to work on both to get it, you’re
And the president, of course, you know, has laid out a whole range of
proposals on the individual side to help make sure to protect middle class
Americans, and we ask the most fortunate 2 percent of Americans to bear a
somewhat larger burden of what the country needs.
On the corporate side, what we think we need to do is clean up all the
loopholes, help lower the rates so we can be more competitive, help make it
easier for small businesses to operate in this environment.
GERSH: Here at BNSF Railway, a lot of their customers have them ship
parts that are then exported overseas, and the companies that assemble them
overseas — put them together overseas and sell them overseas.
But your corporate tax reform would require those companies to pay a
minimum foreign tax. The companies are saying that will make them less
GEITHNER: Well, what we want to do is lower the overall rate by
cleaning up and reducing this huge amount of loopholes across the system.
And that will make the system more fair for companies. And it will make
the investments incentive stronger in this country.
Now as part of that, we have got to be careful we’re not creating new
opportunities and incentives for people to ship jobs and investment income
outside of the United States.
So we think an important principle for reform should be that all
companies pay a minimum tax on their worldwide income so they’re not — you
don’t see, again, more powerful incentives for companies to shift jobs
outside of the United States. That’s very important.
GERSH: The argument comes back from companies, and they say, look,
we’re more competitive overseas. We’ll also be more competitive here at
home. We’ll invest more here at home. So don’t put a minimum tax on us
GEITHNER: Of course, we have heard all of those concerns and these
are things we’re going to work through. But even the chairman of the Ways
and Means Committee, Dave Camp, in his broad outlines for corporate tax
reform, said that Congress should consider as an option a minimum tax like
And he’s doing it as a Republican for the same reason we’re concerned,
because we, again, want to say as we do reform, again, we don’t want a tax
code that creates incentives to move that stuff offshore.
GERSH: On the deficit issue, back in Washington, the policy wonks all
say that the key issue is to get Medicare spending and Social Security
spending under control if we want to get our deficit and debt under
But when I go around the country or to places like Fort Worth and you
ask people, they say that Medicare and Social Security aren’t the problem.
So how do you deal with our deficit when you have that disconnect between
what policy experts are saying and what people are actually saying about
GEITHNER: Well, you’re right, that the biggest drivers for our long-
term deficits are the fact that more Americans are retiring and the price
of health care is rising as we discover new technologies for helping extend
Those are the biggest drivers of the long-term growth in government
costs. They vastly dominate and overwhelm the rest of what people think of
this government in that context.
And if we’re eventually address those long-term deficits, then you
have to get both sides to come together and think about ways to make those
commitments to retirement security, to health care security for retirees,
make those sustainable and affordable over time.
And those are going to probably have to be accompanied by the broader
set of tax reforms that you and I were just discussing. I think the core
thing for people to understand is that we can’t put off forever addressing
this long-term deficit.
We have to do it so we make sure we’re helping future growth. We
create room — preserve room for investing in things we need like
infrastructure and education and innovation.
And it’s also very important for people to realize that there’s no
realistic way of restoring gravity to those long-term deficits without tax
reform that helps generate a bit more revenues for the economy as a whole.
Not realistic to do, not possible to do, and not credible for people
to offer Americans a path through that without tax reform that helps raise
GERSH: Treasury Secretary Timothy Geithner, thank you for your time.
GEITHNER: Good to talk to you.