Entries in Timothy Geither (3)


Geithner: 'Congress Will Raise the Debt Ceiling'

Darren McCollester/Getty Images(WASHINGTON) -- Treasury Secretary Timothy Geithner says he is certain that Congress will raise the debt ceiling, saying leaders are "not going to play around with it" and risk the "catastrophic" consequences of defaulting on the nation's debt obligations.

"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner said in an interview with ABC News' This Week anchor Christiane Amanpour. When asked if he was sure, Geithner responded, "absolutely," adding that Congressional leaders made clear they understood the importance of the matter when meeting with President Barack Obama at the White House last Wednesday.

"I sat there with them, and they said, we recognize we have to do this. And we're not going to play around with it," Geithner said of the White House meeting. "We know that the risk would be catastrophic."

Geithner also spelled out the dire consequences if the debt ceiling is not raised by June.

"What will happen is that we'd have to stop making payments to our seniors -- Medicare, Medicaid, Social Security. We'd have to stop paying veterans' benefits. We'd have to stop paying all the other payments on all the other things the government does," Geithner said. "And then we would risk default on our debt -- and if we did that, we'd tip the U.S. economy and the world economy back into recession -- depression."

While the debt ceiling debate looms large, Geithner says he does not believe the spending cuts agreed to in last week's budget resolution will damage the current economic recovery, as long as a balanced approach is taken.

The treasury secretary said there has been a fundamental shift in understanding the long-term impact of deficits, even if there are still differences between Democrats and Republicans on how to address them.

"Things are different now. We're just coming out of a deeply damaging financial crisis," Geithner said. "Millions of Americans still feel the scars of that crisis now."

He said the challenge is agreeing on fundamental reforms to improve the deficit outlook, while still maintaining important investments in areas like health care and education.

The Tax Battle Ahead

Geithner accepted that disagreements remain with Republicans on the scope of spending cuts and how to reform the tax code, and that those differences may take longer to resolve.

"We have very big disagreements on what the right balance is," Geithner said. "The things we're going to disagree on for some time, we can take more time to resolve."

Geithner does not believe fundamental deficit reduction can happen without ending the Bush-era tax cuts for the wealthiest Americans, which were extended in a temporary agreement last December, and remain in place in House budget committee chairman Paul Ryan's budget plan passed by the House on Friday.

He does, however, think deficits can be reduced without raising taxes on the middle class, by ending tax loopholes and deductions that primarily go to wealthier Americans who itemize their tax returns.

Copyright 2011 ABC News Radio


Rep. Paul Ryan: 'Default Is Not Our Option'

ABC News(WASHINGTON) -- Rep. Paul Ryan agreed with Secretary Tim Geithner that defaulting on our debt would be "catastrophic," but Ryan needs spending reform attached to that vote -- something he says the president will address Wednesday.

“Default is not our option or strategy but we also want to make sure this debt limit increases, which is based on past spending, we get something in place to address future spending and that’s the kind of stuff we’re talking about. Spending cuts, spending control,” he told Good Morning America.

And if those cuts are not attached will he vote to raise the debt limit?

“I don’t accept a notion that that’s not possible. I think it is and the president is probably going to be talking about that today,” Ryan said.

Ryan did not spell out what it would take to avoid default.

The chairman of the House Budget Committee said he’s looking forward to hearing what the President has to say Wednesday -- except for any talk about new taxes.

Copyright 2011 ABC News Radio


Geithner: Entitlement Programs Key to Cutting Deficit

Photo Courtesy - Getty Images(WASHINGTON) -- In a hearing before the House Ways and Means Committee, Treasury Secretary Timothy Geithner defended the president’s budget proposal as a means of restoring fiscal responsibility to an economy riddled by a mounting national deficit.

“Our deficits are too high.  They are unsustainable, and left unaddressed, these deficits will hurt economic growth and make us weaker as a nation,” Geithner said.  “We have to restore fiscal responsibility and go back to living within our means.”

Geithner targeted entitlement programs as the key to reducing the national debt while insisting that Social Security benefits remain protected. 

“Our long-term deficits that we face over the next century are primarily driven by rapid rates of growth in healthcare costs and to a lesser extent by Social Security obligations.  The most important thing we can do to reduce those long-term costs is to reduce the rate of growth in healthcare costs.”

But committee members pounced on the president’s budget proposal for not providing enough guidance in curbing entitlement programs.

“Americans shouldn’t have to wait any longer for some real solutions, and frankly, this budget is a missed opportunity,” Chairman Dave Camp, R-Mich., said. “There‘s nothing on entitlement reform, and there’s little more than lip service about getting the deficit under control.”

Geithner acknowledged that balancing the budget will involve some difficult choices on the part of lawmakers and “will require sacrifice from all Americans.”

Geithner took a brief moment to tout the success of TARP, which was initially projected to cost taxpayers $350 billion but is anticipated to show a positive return for taxpayers.

“I think it will prove to be the most successful financial rescue in modern history,” Geithner said.  “Even recognizing, we face a lot of challenges ahead in digging out of this crisis, repairing the damage caused by it.”

Copyright 2011 ABC News Radio 

ABC News Radio