Geithner: Ready to go over 'cliff' if necessary

WASHINGTON (AP) - Treasury Secretary Timothy Geithner said the Obama administration is "absolutely" ready for the US economy to go over the "fiscal cliff" rather than accept a budget deal that doesn't include higher tax rates for top earners.

Mr Geithner said the administration thinks budget deficits are so large that they can't be closed without boosting tax rates on the wealthiest 2 per cent of Americans. Most Republicans oppose higher rates for any taxpayers.

He also said in an interview on CNBC that the administration would reject a budget plan that didn't include an increase in the federal borrowing limit. That limit is expected to expire early next year.

He said he still thought progress is being made in the budget negotiations and that the outlines of an agreement are becoming clearer.