Geithner: Debt-ceiling debate is ‘ridiculous’

Treasury Secretary Timothy Geithner on Tuesday slammed the debate over raising the debt ceiling as “ridiculous” and said it is “irresponsible” for policymakers to leave the impression that the U.S. might not pay its bills.

Geithner also said he was confident that lawmakers would increase the debt limit, but stressed that he would like to see that happen sooner rather than later. 

The Treasury secretary said the tussle over the borrowing limit “is a ridiculous debate to have.”  

“I mean, the idea that the United States would take the risk — people would start to believe we won’t pay our bills — is a ridiculous proposition, irresponsible, completely unacceptable basic risk for us to take,” Geithner said.

Treasury currently estimates that the debt limit will be breached in the middle of next month, and said that it has certain tools that would delay default until roughly July 8. 

“What I want to make sure they don’t do is to take us too far into June, to take us to close to the edge again,” Geithner said at the Council on Foreign Relations in New York, adding: “And so our basic message to them is: Let’s get this done and get it moving.”

Congressional Republicans say they will vote to raise the limit only if it’s paired with meaningful deficit reduction initiatives. 

House Speaker John Boehner indicated in a recent interview with Politico that there is a chance his chamber might not vote on increasing the debt ceiling, even if that’s not his goal. 

For their part, a group of House Democrats has called for a clean debt-limit vote, and Rep. Peter Welch, the Vermont Democrat spearheading that effort, signaled Tuesday that Boehner should take his own advice on the need for an adult conversation on the issue. 

On Tuesday, Geithner also said that the economy was staring down new challenges, notably the spike in oil prices, and observed that forecasters were predicting that first-quarter growth would likely be under 2 percent.

But the secretary, while also acknowledging the challenges of the high unemployment rate and the injured housing finance system, also noted that growth forecasts for the next two years were between 3 percent and 4 percent. 

“The economy is definitely healing,” Geithner said.

{mosads}The secretary added that he thought other countries transitioning out of crisis mode in the past had rolled back spending too quickly, thus cutting into the economy’s ability to expand. 

He also said that Republicans’ blanket opposition to tax increases had caused them to place all of the burden for getting the country’s books in order on cuts to entitlement programs and services for the poor and disabled. 

The House Republicans’ fiscal 2012 budget, which the chamber passed this month, included major changes to both Medicaid and Medicare, an approach Geithner contrasted with President Obama’s recent speech on deficit reduction. For their part, GOP lawmakers have slammed Obama for making tax increases for the wealthy the sole concrete proposal in that address. 

“The president laid out this $4 trillion deficit reduction plan over a 12-year period — again, same broad magnitude of cuts that the Republicans embraced, much more balanced package, and you found Democrats largely embraced that imperative,” Geithner said, adding: “This is a problem within our capacity to solve.”

With the dollar having fallen to its lowest level in more than two years, Geithner also reiterated the government’s commitment to keeping the dollar strong. 

“I just want to make it clear to everybody that our policy has been and will always be, as long, at least, as I’m in this job, that a strong dollar is in our interest as a country, and we will never embrace a strategy of trying to weaken our currency to gain economic advantage at the expense of our trading partners,” Geithner said.