Geithner Sees Progress Toward Accord to Reduce Record U.S. Budget Deficits
U.S. Treasury Secretary Timothy Geithner
Brendan Hoffman/Bloomberg
U.S. Treasury Secretary Timothy Geithner.
U.S. Treasury Secretary Timothy Geithner. Photographer: Brendan Hoffman/Bloomberg
April 19 (Bloomberg) -- Treasury Secretary Tim Geithner discusses the U.S. budget deficit. Geithner, speaking with Peter Cook on Bloomberg Television's "In the Loop," also discusses banking regulation and the European debt crisis. (Source: Bloomberg)
Treasury Secretary Timothy F. Geithner said he’s confident U.S. political leaders will bridge their differences and move toward a long-term plan to narrow record budget deficits and reduce the debt.
“We have an opportunity now over the next two months to make some real progress,” Geithner said in an interview on Bloomberg Television today. “What we agree on is putting in place strong targets for savings, deficit reduction over a specific time frame with enforceable limits,” he said.
Geithner also said he “absolutely” didn’t have to reassure overseas buyers of U.S. debt after Standard & Poor’s lowered the outlook on the nation’s AAA rating to “negative” yesterday. President Barack Obama today begins a tour promoting his proposal to cut long-term budget deficits as Democrats and Republicans use the S&P decision to bolster their competing arguments on the best way to reduce gaps.
The yield on the benchmark 10-year Treasury note fell one basis point, or 0.01 percentage point, to 3.37 percent at 5 p.m. in New York today. The yield is down from 3.80 percent a year ago and below the average of 5.21 percent over the last two decades, even with the U.S. projected to post a deficit in excess of $1 trillion for a third consecutive year.
“There’s a lot of confidence in the capacity of this economy to grow, to make sure that we can meet our commitments or obligations,” Geithner said. “You can see that in the price at which we borrow every day.” In a separate interview with Fox Business Network today, he said the U.S. will “absolutely” keep its AAA credit rating.
Top Rating
S&P said the government risks losing its top rating unless policy makers agree on a plan by 2013 to reduce deficits and the national debt. The company maintained the rating on U.S. long- term debt while lowering its outlook for the first time.
Geithner also said today that so-called entitlement programs “have to be” part of the discussion on deficit reduction.
“The only way to do this in a way that’s responsible is to do a balanced, comprehensive package,” he said. The administration and Congress need to work together in coming months to agree on a framework for cutting deficits, he said.
Turning to Europe, Geithner said leaders are following through on pledges to help Greece and Ireland weather the sovereign-debt crisis.
“If you look at what the governments of Greece, of Ireland and many others are doing, they are doing incredibly difficult reforms to help make sure they bring their deficits down, their economies are restructured, financial systems stronger,” he said.
European leaders “have the capacity to do this” and “have said they will do whatever is necessary to make sure they can help those countries manage those challenges, get through this problem,” Geithner said. “They’re making some progress.”
To contact the reporters on this story: Ian Katz in Washington at ikatz2@bloomberg.net; Peter Cook in Washington at pcook6@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net;
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