Geithner: Failure on debt deal not an option

Treasury Secretary Tim Geithner said today on CBS' "Face the Nation" that Washington leaders must agree on a deal to raise the debt ceiling by the end of next week to avoid serious risks to the economy.

"I do believe that this week, and certainly by the end of next week, we have to have agreement on the outlines of a package," Geithner told host Bob Schieffer. "It has to be clear that the leadership have found a way to solve this and they have a path to get votes for something."

Republicans have insisted on creating a deficit and debt reduction plan as a condition of voting to raise the debt ceiling - the amount of money that the U.S. government is technically allowed to borrow.

President Obama has been seeking a deal of both spending cuts and increased revenue that includes $4 trillion in budget savings over a decade, but House Speaker John Boehner said on Saturday that a mid-size package of reforms that does not include any kind of increase in taxes on anyone is the only politically viable solution.

Geithner said today that the president is still pushing for the largest deal possible.

Mr. Obama and his economic team have repeatedly warned of catastrophic consequences for the U.S. and the global economy if Congress does not increase the $14.3 trillion debt ceiling by August 2.

"You can't wait until August 2," Geithner said. "The credit rating agencies of the world have already made it clear in public, the longer we go into July without a path to resolution, the more risk they are going to put a cloud over our credit rating.

"There's no reason why the leadership in Congress should let that happen," he added. Failure to reach an agreement, he warned, "is not an option."

Some conservatives have suggested that the administration's warning about the Aug. 2 deadline amounts to scare tactics, but Geithner said today, "no responsible leader" would take the risk of defaulting on the nation's loans.

"The risk we face starts to happen in July, but then on August 2 we're left running on fumes," he said. "We'd have no capacity to borrow."


Follow Us

Watch CBSN Live

Watch CBS News anytime, anywhere with the new 24/7 digital news network. Stream CBSN live or on demand for FREE on your TV, computer, tablet, or smartphone.

Watch Now

Face on Twitter

New Android App

For your Android phone and tablet, download the FREE redesigned app, featuring CBSN, live 24/7 news.

The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App