Treasury Secretary Timothy Geithner expressed confidence Sunday that Congress and the White House will ultimately agree on a plan to raise the debt ceiling and avoid default, although he conceded that the politics of striking a deal before the Aug. 2 deadline remains challenging.
Appearing on multiple Sunday morning news programs, Geithner made President Barack Obama’s case that any deal should be comprehensive and extend the debt ceiling through the end of 2012 — after the president’s re-election campaign concludes.
The Treasury secretary said on CNN’s “State of the Union” that conversations between Obama and Speaker John Boehner were ongoing, despite the Ohio Republican’s public withdrawal from negotiations Friday, indicating that Obama’s priority was to prevent default.
“We have to lift this credit default from the economy for, you know, for the next 18 months. We have to take that threat off the table through the election,” Geithner said on “Fox News Sunday,” later adding: “We’re running out of runway. We’re almost at the edge. I never thought [Congress] would take [it] this close to the edge.”
Geithner said on ABC’s “This Week” that the two options on the table to reach a deal comprise the president’s “grand bargain” approach that would feature spending cuts, entitlement reforms and some tax increases, and a plan first proposed by Senate Minority Leader Mitch McConnell (R-Ky.) that would enable Obama to raise the debt ceiling over the objections of Congress. Senate Majority Leader Harry Reid (D-Nev.) also has indicated support for this plan with modifications.
But House Republicans have suggested that those plans would have trouble getting enough votes to clear their chamber, and Boehner said on “Fox News Sunday” that he was focused on a plan based on the Cut, Cap and Balance legislation that was approved by the House last week but was defeated in the Senate.
Geithner insisted that lawmakers and the administration would find a way to raise the debt ceiling and avoid default, despite the political divide and the short time remaining to do so.
“Well, I think inevitably we are going to do this in two stages,” Geithner said on CNN. “You know, we’ll lock in the savings we agree to, and then there will be a second stage where Congress is forced to identify and agree on a set of other reforms: tax reform that raises revenue and entitlement reform to make sure we put that on a sustainable footing.”
Daniel Newhauser contributed to this report.