Treasury Secretary Timothy Geithner on Tuesday shrugged off Standard and Poor's decision to downgrade the country's AAA debt-rating outlook, pointing out that the country is financially healthier than other countries with similar ratings and added consensus is rising on the direction to narrow the country's deficits.
"If you look at the U.S. economy now, our underlying growth rates are substantially stronger than any of the major economies," Geithner tells CNBC.
The U. S. population is young and pension, healthcare and other commitments are much lower than elsewhere.
"I think we're in a much stronger position to manage these challenges, and I'm sure we can do that," he told CNBC.
Despite disagreements among Democrats and Republicans on spending issues, consensus is emerging.
"I think things are better than they've been if you want to think about the prospects of improving our fiscal position," Geithner says.
President Barack Obama has proposed $4 trillion in cuts to the country's deficits, and while Democrats and Republicans might not agree on every aspect of the president's plan, they do agree more on the need for spending reform.
"Both sides understand that if we're going to do this, we're going to do it together," Geithner says.
"We disagree on how to do that, and we're not going to resolve all those disagreements within the next couple of months, but what we can do is lock in some clear targets for deficit reduction."
While challenges are "daunting" leadership can reduce deficits without harming the middle class, Geithner adds.
Democrats and Republicans will likely agree on raising the debt ceiling, Geithner says, pointing out that both parties will work to agree on multiyear targets to put the country on a path to lowering its fiscal burden.
"That's the economic imperative. That's the important thing to do," he said.
"For that to work, you have to do it in ways that's going strengthen future growth prospects."
That means locking investing in areas of the country such as infrastructure and education while tackling spending at the same time.
It also means not shifting costs such as healthcare onto senior citizens by telling them to go out and buy insurance but rather, working on ways to lower healthcare costs as a whole.
"The president's approach is to reduce the rate of growth and costs by changing how we use healthcare, by making sure we use healthcare more efficiently. There's an alternative strategy out there, which some Republicans support, which is to shift the cost of healthcare to the individual and to make seniors go out into the private market and buy insurance and negotiate with the insurance companies over what type of care they get," Geithner says.
While different views on how to fix healthcare costs may be out there, more reforms would be possible to complement existing measures as long as they lower costs in the future.
"You can't just do it by shifting costs, you have to reduce the rate of growth and costs."
Many analysts and investors agree that the Standard & Poor's decision to downgrade the outlook for U.S. debt serves as a warning bell from the world's investment community to Washington to stop playing politics and start agreeing a path to economic health.
"While it has been widely recognized that the U.S. credit rating may have been at some risk of a downgrade for years, S&P's action still comes as a major wake-up call for policymakers, and investors," says Douglas Porter, deputy chief economist at BMO Capital Markets, according to NPR.
"This may well prompt more forceful action on the deficit in the next two years, which in turn will act as a more forceful drag on the economic recovery."
Others point out that there are no equal investment alternatives to the U.S. thanks to the depth and liquidity of the economy and markets here.
"For most investors there is nowhere else to put their money as the U.S. still has the strongest, deepest, most-liquid markets in the world," says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ, according to Bloomberg.
"There is no alternative.
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