Tags: Geithner | No | More | Time | Debt | Talk

Geithner Says ‘No Way’ for More Time on Raising Debt Limit

Thursday, 14 Jul 2011 10:55 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Treasury Secretary Timothy F. Geithner warned lawmakers there’s no possible extension to the time limit to raise the federal debt ceiling as Standard & Poor’s put the U.S. sovereign rating on watch for a downgrade.

There’s “no way to give Congress more time” on lifting the debt limit, Geithner said after meeting with Democratic lawmakers on Capitol Hill in Washington. He has repeatedly said U.S. borrowing authority will end on Aug. 2 without congressional action.

Geithner’s remarks suggested the Treasury Department is approaching the end of its efforts to shift federal cash flows to avert a breach of the mandated borrowing limit. S&P today joined Moody’s Investors Service in warning that the nation may lose its top AAA rating, saying that there’s a “small, though increasing” risk of a default on U.S. debt obligations.

The debt limit’s proximity has left investors unfazed, with the Treasury attracting higher-than-average demand for a third consecutive sale at an auction of 30-year bonds today. Benchmark 10-year note yields were at 2.97 percent at 10:23 a.m. in Tokyo, heading for a second consecutive weekly decline.

“We’ve looked at all available options and we have no way to give Congress more time to solve this problem and we’re running out of time,” Geithner said after meeting with members of the Senate Democratic Caucus on efforts to raise the $14.3 trillion debt ceiling. “The eyes of the country are on us and the eyes of the world are on us and we need to make sure we stand together and send a definitive signal that we are going to take the steps necessary to avoid default.”

Credible Solution

The U.S.’s long-term rating may be lowered by one or more notches into the AA category in the next three months if S&P concludes Congress and President Barack Obama’s administration haven’t achieved a credible solution to the rising U.S. government debt burden and aren’t likely to achieve one in the foreseeable future, according to a statement today.

“Owing to the dynamics of the political debate on the debt ceiling, there is at least a one-in-two likelihood that we could lower the long-term rating on the U.S. within the next 90 days,” S&P said.

S&P reduced the outlook on the U.S. rating to negative from stable on April 18. Since then, it said, the debate over long- term budget cuts has “only become more entangled,” with the result that “there is an increasing risk of a substantial policy stalemate enduring beyond any near-term agreement to raise the debt ceiling.”

Backup Options

Senate leaders from both parties are discussing backup options to avert a U.S. default by adding spending controls to a plan that would grant Obama unilateral power to raise the debt limit.

Obama told lawmakers they have until tomorrow to decide whether they can reach a deal to make significant cuts in the deficit or settle for another way to raise the $14.3 trillion debt ceiling before U.S. borrowing authority expires Aug. 2, two Democratic officials said.

The president has said he would veto any plan that doesn’t raise the debt ceiling through the 2012 elections. Republicans demand $2 trillion or more in spending cuts without any tax increases.

Federal Reserve Chairman Ben S. Bernanke warned in testimony to the Senate Banking Committee that lawmakers would cause a “self-inflicted wound” if they prompt a credit-rating downgrade by failing to raise the debt ceiling.

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
You May Also Like
Around the Web
Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved