U.S. Treasury Secretary Timothy F. Geithner said today that it is “essential” for Congress to raise the $14.29 trillion debt limit to preserve investor confidence in the U.S.
Geithner said the Obama administration would tackle the country’s fiscal outlook by proposing a “detailed set of reforms” in budget proposals next week. He also pledged an “active” tax-reform process aimed at helping the U.S. be more competitive in an interview broadcast today on CNBC television.
The Treasury secretary reiterated his view that the debt limit shouldn't be used as a bargaining chip and that the U.S. doesn’t have a way to “prioritize” debt payments over other obligations. Even if Congress tried to pay investors ahead of other creditors, it would still be “default,” he said in the TV interview.
At a Brookings Institution conference today, Geithner said budget cuts won’t be enough to rein in the deficit. Republicans have been calling for specific reductions in exchange for raising the debt limit.
“We’re not going to solve our long-term fiscal problems just by spending less” on non-defense discretionary spending, Geithner, 49, said at the event.
The Treasury chief said the U.S. housing market will take two or three years to recover from the worst of the financial crisis. He said the administration can take initial steps to improve housing finance on its own and will then need Congress to act.
“Ultimately we’re going to have to explain to the market what the end game’s going to be and we can’t wait too long,” Geithner said.
Earlier today, the administration released its long-awaited white paper on options for phasing out Fannie Mae and Freddie Mac, the government-backed housing companies.
© Copyright 2017 Bloomberg News. All rights reserved.