WASHINGTON, July 10 (UPI) -- U.S. Treasury Secretary Timothy Geithner said Sunday Republican demands for spending cuts would act as a tax increase on senior citizens and middle class.
Geithner said on CBS' "Face the Nation" that addressing the budget deficit solely through spending reductions would result in higher out-of-pocket costs for Medicare that would have to be born by fixed-income seniors.
"The average cost of Medicare for the average beneficiary when fully phased in would go up by $6,500 a year," Geithner said. "That's like a $6,500 tax increase on elderly Americans."
The secretary said President Obama and the Democrats were sticking to their guns on spending cuts and tax increases because they saw Medicare and Social Security as "basic commitments" to retirees.
Geithner added that Republican leaders, who were meeting with President Obama at the White House Sunday evening, recognized the need to both strike a budget and raise the national debt ceiling, but were thus far hamstrung politically by the party's hard-liners.