Hatch Slams Geithner on Plan for Market Turmoil

Republican Senator Orrin Hatch of Utah called on U.S. Treasury Secretary Timothy Geithner today to provide a contingency plan for “dealing with market turmoil” in the event of further credit ratings downgrades or impasses over the U.S. debt limit.

Hatch, the top Republican on the Senate Finance Committee, said in a letter to Geithner that the Aug. 2 deadline that the Treasury Department set for Congress to approve an increase in the U.S. debt ceiling was “elusive.”

Hatch said Geithner was not responsive to him in an earlier inquiry about the Treasury’s short-term cash flow projections around that date. The Treasury’s closing operating cash balance was more than $54 billion on August 2, he pointed out.

“Your response concerning cash flows was elusive, identifying August 2nd as still being the date that Treasury expected ‘to exhaust the extraordinary measures we have employed to extend our borrowing authority in the absence of congressional action to increase the debt limit,’” Hatch wrote, citing Geithner’s earlier response to him. “I asked about projections of cash exhaustion and not solely about exhaustion of measures to extend borrowing authority.”

Hatch requested more information about contingency plans in the event of further downgrades, after Standard & Poor’s lowered the nation’s AAA rating to AA+. Two other ratings services have maintained the highest rating for Treasuries.