2 Obama officials: No guarantee taxes won't go up

http://finance.yahoo.com/news/2-Obama-officials-No-apf-2491158742.html?x=0&.v=7

WASHINGTON (AP) -- President Barack Obama's treasury secretary said
Sunday he cannot rule out higher taxes to help tame an exploding
budget deficit, and his chief economic adviser would not dismiss
raising them on middle-class Americans as part of a health care
overhaul.

As the White House sought to balance campaign rhetoric with governing,
officials appeared willing to extend unemployment benefits. With
former Federal Reserve Chairman Alan Greenspan saying he is "pretty
sure we've already seen the bottom" of the recession, Obama aides
sought to defend the economic stimulus and calm a jittery public.

Treasury Secretary Timothy Geithner and National Economic Council
Director Larry Summers both sidestepped questions on Obama's
intentions about taxes. Geithner said the White House was not ready to
rule out a tax hike to lower the federal deficit; Summers said Obama's
proposed health care overhaul needs funding from somewhere.

"There is a lot that can happen over time," Summers said, adding that
the administration believes "it is never a good idea to absolutely
rule things out, no matter what."

During his presidential campaign, Obama repeatedly vowed "you will not
see any of your taxes increase one single dime." But the simple
reality remains that his ambitious overhaul of how Americans receive
health care -- promised without increasing the federal deficit -- must
be paid for.

"If we want an economy that's going to grow in the future, people have
to understand we have to bring those deficits down. And it's going to
be difficult, hard for us to do. And the path to that is through
health care reform," Geithner said. "We're not at the point yet where
we're going to make a judgment about what it's going to take."

Selling that proposal, however, has proved tricky.

On Friday, the government released a report that suggested the worst
recession in the United States since World War II appears on the verge
of ending. The economy dipped only slightly in the second quarter of
this year -- falling at a 1 percent annual pace, better than expected.

The president cautioned against instant turnaround, though.

"Well, as I've said, I think we maybe are beginning to see the end of
the recession, but it's still going to be some time before we are
seeing companies hiring again. That's usually the last thing that
happens," Obama said in an interview with Univision that aired on
Sunday.

"So I think we are still going to have a tough remainder of the year
-- probably until next year -- but, you know, at least what we are
seeing -- we've pulled back from the possibility of a depression.
That's not the danger."

Many analysts think the economy is starting to grow again in the
current quarter, setting up a long-awaited recovery.

"Most private forecasters -- and let's use their judgment -- suggest
you're going to see unemployment start to come down maybe beginning in
the second half of next year," Geithner said, adding those same
economists predict positive growth during the second half of this
year.

At the same time, Geithner and other administration officials are
contemplating how to ask Congress to extend -- again -- unemployment
benefits for the millions of Americans who have lost their jobs in
recent months. The proposal drew measured support from Sen. Jim
DeMint, R-S.C., as long as the benefits are drawn from the already
approved economic stimulus package.

"We need to take care of those who are unemployed, but we also need to
make sure they get jobs," he said.

Those jobs, though, are still elusive. Greenspan said the economy is
slowly coming back.

"Collapse, I think, is now off the table. We were teetering for a
while," he said.

Greenspan said he doesn't think the Federal Reserve should be
considering raising interest rates to ward off inflation, although he
added that the Fed will have to rein in credit and raise rates at some
point.

Obama's opponent for the presidency, Sen. John McCain, questioned
whether the administration's actions will prove beneficial for the
country.

"I think it's pretty clear, if you pump trillions of dollars into the
economy, you will see some recovery," the Arizona Republican said
while giving Obama credit for the improvement. "But the long-term
consequences, I think, are going to be, unfortunately, devastating
unless we do something about it."

Geithner and Greenspan appeared on ABC's "This Week." Summers appeared
on NBC's "Meet the Press" and CBS's "Face the Nation." DeMint was
interviewed on "Fox News Sunday." McCain spoke with CNN's "State of
the Union."