Timothy Geithner: US ‘absolutely’ should get rid of debt ceiling
Sat Nov 17, 2012 1:48PM
Treasury Secretary Timothy Geithner said the U.S. “absolutely” should get rid of the debt ceiling as soon as possible.
“It would have been time a long time ago to eliminate it,” Geithner told Bloomberg TV on Friday. “The sooner the better.”
Geithner did not commit to personally doing anything to eliminate the nation’s legal limit on borrowing. When pressed on the issue, Geithner told Bloomberg TV: “This is only something only Congress can solve. Congress put it on itself.”
“Only once, last summer, did people decide to use it to threaten default on the American credit for the first time in history as a tool for political advantage,” he continued. “And that’s not a tenable strategy for the country.”
Geithner said he doesn’t plan to keep his job much longer. He told Bloomberg TV that he’s agreed to stay as treasury secretary “until mid-January.”
The U.S. will hit the debt ceiling sometime in mid-February or early March if Congress does not raise it. And, just like last year, some congressional Republicans, including House Speaker John Boehner (R-Ohio), have said they plan to use the debt ceiling deadline as leverage to force spending cuts. Meanwhile, the “fiscal cliff,” or $1.2 trillion in spending cuts and tax hikes, is scheduled to take place on Jan. 1 if Congress does not reach a deficit reduction deal before then.
Not raising the debt ceiling would have a destructive effect on the economy. It would force steep government spending cuts and likely cause a financial crisis and recession. The government would be at immediate risk of defaulting on its debt. Huffington Post
FACTS & FIGURES
House Speaker John Boehner says Republicans want to cooperate with President Barack Obama on reducing federal deficits, but not by raising income tax rates. Huffington Post
The White House says President Obama would also veto any legislation extending tax cuts for families making $250,000 or more.
The International Monetary Fund on November 8 urged the United States to quickly reach an agreement on a permanent fix to avoid automatic tax hikes and spending cuts early next year, saying a stop-gap solution could be harmful to the global economy. The Indian Express
The IMF says the U.S. economy could fall back into recession if Congress fails to avert the package of tax hikes and spending cuts. Reuters
Senate Finance Ranking Member Orrin Hatch and Senate Budget Ranking Member Jeff Sessions sent a letter to Secretary Geithner on Oct. 15 demanding to know by Non.1 when exactly the debt limit would be reached. Geithner failed to respond to the letter.
The United States has been running annual deficits of over $1 trillion for several years. National debt now tops $16 trillion. Reuters