Geithner: Obama still seeking large debt deal

President Obama is still seeking the largest deficit reduction deal possible, even after House Speaker John Boehner said this weekend that a smaller deal is more politically feasible, Treasury Secretary Tim Geithner said today on CBS' "Face the Nation."

"What the president wants to do, and he's bringing the leadership to the White House this evening, to keep at it, he wants to do the largest possible deal that's going to do the most for the economy," Geithner told "Face the Nation" host Bob Schieffer. "And it's very hard politically, it's going to take some movement on both sides for that to happen. The president has made it clear he's willing to do some very difficult political things for him, for his party, but the Republicans are going to have to do some things too."

President Obama has been seeking a deal that includes $4 trillion in budget savings over a decade. 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.

The president and his economic team have repeatedly warned of catastrophic consequences for the U.S. and global economy if Congress does not increase the $14.3 trillion debt ceiling by August 2. Another round of talks is scheduled for Sunday evening.

"Failure is not an option," Geithner said. "The question is how good a deal it's going to be."

On Saturday night, Boehner said a mid-size package of reforms that does not include any kind of increase in taxes on anyone is the only politically viable solution.

The Treasury Secretary said he was optimistic that a deal would be reached. "The question is: are we going to have an agreement that's going to be good for the economy?" he said.

Geithner said that Republicans want a smaller deal than the president because the GOP is only interested in reducing the deficit with spending cuts.

"And as you saw on the Ryan budget, if you try to do it with just cuts, you're putting unacceptably deep cuts in benefits for Medicare beneficiaries in the future and you can't do that politically, and it's unfair to do it," he said.

Geithner said Mr. Obama is willing to make "politically difficult" decisions to modify entitlement programs like Social Security. He said the president has proposed "very substantial savings" in that area while maintaining the integrity of the program.

"The president has been clear from the very beginning, that to protect these programs, these critical programs for Americans - and they are absolutely essential to what defines the country - the basic commitment to retirement security and to health care when you retire are basic commitments that define this country, and to preserve those, we have got to find ways, in a fair way, to preserve those programs over time," he said.