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Geithner Expects Agreement on Broad Outline for Deficit Reduction

Official White House Photo by Pete Souza(WASHINGTON) -- Treasury Secretary Timothy Geithner said Tuesday that he expects the president and congressional leaders to reach an agreement on a broad outline for deficit reduction by the end of the week.

“I think the leaders understand we don't have a lot of time,” Geithner said Tuesday to the Women in Finance Investment Symposium at the Treasury Department. “We want to wrap up the broad outlines of an agreement by the end of this week, certainly by the end of next week so we have time to legislate it, put it in place.”

The head of the Treasury stressed that Congress will pass an increase to the debt ceiling before the Aug. 2 deadline because “failure is not an option.”  

“We are a country that pays its bills and I very much appreciate the statements by the leadership, not just Democrats but Republican leadership, that recognize default is not an option,” he said.

Geithner said the agreement needed to have the following components:

-Savings across “all parts of the government,” including entitlements and defense
-Provisions to strengthen the recovery and increase job growth such as investments in education and    
  infrastructure and stronger investment incentives
-Tax reforms to reduce loopholes, subsidies, and tax expenditures within the tax code

Republicans have staunchly rejected any tax increases. House Speaker John Boehner said Monday that tax revenue increases were “never on the table.”    

“The American people will not accept -- and the House cannot pass -- a bill that raises taxes on job creators,” Boehner said on his way into Monday’s debt ceiling negotiations at the White House.

Geithner said President Obama’s tax changes are “modest” and “good economic policy” for long-term growth.

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