Treasury Secretary Timothy F. Geithner said the Obama administration wants the most comprehensive deficit-cutting deal possible and reiterated that failing to raise the debt limit could have “catastrophic” consequences.
“We have to find a way to pass an agreement, but the president is going to keep working toward the largest deal we can do, because that’s the right thing for the country,” Geithner said today on NBC’s “Meet the Press” program.
Obama and congressional leaders are seeking a deficit-slashing deal to pave the way for a vote in Congress to increase the government’s $14.3 trillion debt limit, a move the Treasury Department says is needed by Aug. 2 to avert a default on the nation’s financial obligations.
Geithner said Congress has no alternative to raising the debt limit and there are no “constitutional” delays available. A default resulting from failure to raise the ceiling could do “catastrophic” damage to the U.S. economy, he said.
Some Democrats in Congress have discussed the idea of claiming presidential authority to continue borrowing without congressional approval based on an interpretation of the Constitution’s 14th Amendment.
House Speaker John Boehner said yesterday he will pursue a smaller deficit reduction accord than the one that President Barack Obama is seeking because the White House won’t approve a bigger deal without tax increases.
Boehner told the president yesterday that he wants to pursue a deal along the lines of that being discussed by the working group led by Vice President Joe Biden.
Obama was spending the weekend at Camp David, the presidential retreat in Maryland, and will return today for further debt talks with congressional leaders.
Geithner, in a separate appearance on the CBS program “Face the Nation,” said the outlines of a deal must be completed in the next two weeks to make the Aug. 2 deadline. The Obama administration won’t accept a deal that puts the “burden” on the middle class and elderly, he said.
An agreement without any “tax reforms, without revenues” would force “terribly deep cuts in benefits to Medicare beneficiaries,” Geithner said. The House Republicans’ budget proposal, “when fully phased in,” would increase the average cost to Medicare beneficiaries by $6,500 a year, he said.
“That’s like a $6,500 tax increase on elderly Americans,” Geithner said. “So the only way to do this is in a balanced way.”
Geithner reiterated that he will remain Treasury secretary for the “foreseeable” future, without being more specific. Geithner has signaled to White House officials that he’s considering leaving after a debt-limit deal is reached, Bloomberg News reported June 30, citing three people familiar with the matter.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, said on “Fox News Sunday” that he also favors “the biggest deal possible. We’re just not going to raise taxes in the middle of this horrible situation.”
Senator Jim DeMint, a South Carolina Republican, said Geithner has “been irresponsible” in his comments on the impact of failing to raise the debt limit. Any deal should include a pledge to let states vote on a constitutional amendment requiring the federal government to balance its budget each year, DeMint said on “Fox News Sunday.”
White House Chief of Staff Bill Daley, speaking on ABC’s “This Week” program, said “there’s no question in my mind” that congressional leaders “will not allow the first default in the history of the country to occur.”