Fin24

Geithner confident on debt limit deal

2011-04-17 15:30

Washington - Treasury Secretary Timothy Geithner expressed confidence on Sunday that feuding US political parties will reach an agreement to lift the country's debt limit before its is forced to default.

With Republicans demanding longer-term spending cuts in return for voting to raise the debt ceiling, Geithner said the administration was willing to enter parallel talks, but in the end the ceiling would be raised either way.

"We want Congress to put in place a comprehensive framework, a balanced framework, that can reduce our long-term deficits. And we're going to work hard to do that," he told NBC's "Meet the Press".

"But if by the time we need to raise the debt limit, we haven't worked all that out, Congress still has to raise the debt limit."

"Leadership recognizes that," he said pointing to closed door meetings with Republicans.

The White House has warned of financial "Armageddon" if Congress refuses to raise the $14.29 trillion debt limit.

The limit is set to be reached by mid-May and lawmakers must take action by July or see the United States default on interest payments on its debt.

But the move has become embroiled in fiercely partisan battles over the economy and spending.

Though Republican leaders say they will ultimately raise the ceiling, they are demanding more expenditure cuts from programs cherished by Obama's Democrats in return.

"Congress is going to have to raise the debt limit. They understand that," Geithner told the NBC program. "That's absolutely essential to preserve the credit worthiness of the United States of America."

"Again, this is an absolutely critical thing for people to understand. This is about the trust and confidence in the American people, and the world is watching us.