Geithner Says GOP to Act on Debt Cap

April 18, 2011

The Wall Street Journal

Treasury Secretary Timothy Geithner said Republican leaders have assured the White House they are prepared to lift the debt ceiling in time to avoid disruptions to capital markets and a potential credit default.

In interviews aired on the Sunday talk shows, Mr. Geithner said House Speaker John Boehner and other senior Republicans told President Barack Obama in discussions last week that they were aware of the risk of a credit default and were open to lifting the limit even in the absence of a comprehensive deal to slash the country’s debt load.

The White House has promised to push ahead on a sweeping long-term deal to pare government spending, but officials say that might not come together until late June at the earliest. The Treasury Department says the U.S. will exceed the current limit, now set at $14.3 trillion, by mid-May and could default on its debt in early July if no action is taken to raise the ceiling.

Mr. Geithner said the two pursuits—sealing a long-range deal and lifting the ceiling—may have to run on parallel tracks. “But if by the time we need to raise the debt limit, we haven’t worked all that out, Congress still has to raise the debt limit,” Mr. Geithner said on NBC’s “Meet the Press.” Republican leadership, he said, “recognizes that.”

But differences remain between the two sides on what steps will be needed to reach agreement on lifting the debt limit. Republicans are reluctant to let the leverage of the ceiling-limit pass without forcing another round of spending cuts, and Mr. Obama has acknowledged that Republicans won’t agree to lift the debt limit without at least another round of spending cuts.

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