Timothy Geithner moves to allay market concerns about S&P report on U.S. credit rating
Treasury Secretary Timothy F. Geithner took to the business airwaves to try to ease market concerns about the U.S. fiscal situation in the wake of Monday's warning from Standard & Poor's that the nation's AAA credit rating was in danger.
Geithner, one of the Obama administration's point people on the issue, told CNBC and Bloomberg TV on Tuesday that he was optimistic that the White House and congressional Republicans would bridge their sharp differences and agree on a way to reduce the huge budget deficit.
"What I would say to people around the world and to Americans, to businessmen, to investors around the world, [is] that the president recognizes and the leadership in the Congress recognize that we have to start to bring these deficits down," Geithner told CNBC. "Now, we can do that. That's within our capacity to do."
Standard & Poor's said there was a one in three chance that it would lower the nation's AAA rating because the government might not be able to address its mounting budget deficits. Asked about the S&P report, which rattled the markets Monday, Geithner said he disagreed with the credit rating agency's negative assessment.
"Actually, I think things are better than they've been if you want to think about the prospects for improving our long-term fiscal position," Geithner said. "I think if you listen very carefully now to what's happening in Washington, you see people on both sides, Democrats and Republicans, agree with the president that we have to put in place some reforms now to bring down our long-term deficits."
Geithner said he saw progress as congressional leaders and the White House looked to agree on targets for reducing the budget deficit as well as to raise the $14.3-trillion ceiling on the U.S. debt, which will be reached in just a few weeks.
"The Congress is going to pass an increase in the debt ceiling," Geithner said. "They recognize that. They know they have to do that. They've always done that."
Geithner briefed President Obama on Saturday about the S&P report's upcoming release, the White House said. And Tuesday, Geithner echoed White House comments that S&P was misreading the partisan bickering in Washington as reflecting an inability to deal with the budget deficit.
"Washington’s a hard place to read, and it’s hard for people looking at Washington to look past the political rhetoric and be confident that you’re going to see politicians here do … the right thing," Geithner told Bloomberg TV. But he said there was "a lot of consensus" in Washington about addressing the fiscal situation and that politicians "have to translate that into action."
-- Jim Puzzanghera