US debt default ‘not going to happen’: Geithner (AFP) 0
WASHINGTON (AFP) ? The United States will not default on its debt, US Treasury Secretary Timothy Geithner said Sunday, as the clock ticks down to reaching a deal by August 2 to raise the nation’s debt ceiling.
“It’s unthinkable we would not meet our obligations on time,” Geithner told CNN in an interview. “It’s not going to happen.”
Congress must also come up with a plan which lifts the threat of a US default of its huge $14.3 trillion debt for at least 18 months, beyond the November 2012 elections, Geithner said.
“We have to take that threat off the table. But we also have to make sure that we come together to make some long term savings,” he told Fox News Sunday. “We’re trying to avoid default today, and the specter of default in the future.”
President Barack Obama and and top lawmakers were again searching for an elusive deal Sunday to avert an unprecedented US default which could happen as early as August 2 when the government runs out of funds to pay its bills.
Geithner said Republican House Speaker John Boehner and Senate Minority Leader Mitch McConnell “had been absolutely clear, they are not going to let this country default.
“They are not going to put us in the position where the members of their party who have been threatening default, or even praying for default…They are not going to let that happen.”
But on ABC’s “This Week,” he hit out at what he called “a vocal, loud, frankly irresponsible minority in their parties who… want to take this country to the edge of default. And that is not acceptable.”
The treasury chief said under one plan, a committee with exceptional powers would be set up in the coming months to put together a framework of tough reforms to the US economy with a clear deadline for moving forward.
The United States has “to demonstrate to the world that we can get our fiscal house in order,” Geithner added on Fox News Sunday.
Behind closed doors at the White House and in Congress, polarized US leaders are struggling to come together despite fears the stalemate could send global markets tumbling, starting with early Monday trade in Asia around 9:00 pm Sunday (0100 GMT Monday).
“Both leaders recognize they’re running out of time,” Geithner told ABC.
“They need get this process moving in the House by Monday night to achieve that deadline. They need to have a framework that they know with complete confidence will pass both houses of Congress, that is acceptable to the president, and that should happen today. “
Washington hit its debt ceiling on May 16 but has used spending and accounting adjustments, as well as higher-than-expected tax receipts, to pay its bills and continue operating up to the fast-approaching day of reckoning.
But pressed several times, Geithner refused to reveal if the Obama administration had a back-up plan and had begun deciding which checks would be signed and which would not.
“We will do everything we can to mitigate the damage,” he told Fox News Sunday, revealing that the United States writes 80 million checks a month.
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