Geithner: GOP will bear responsibility for default

[Vi-Jay 218]

Geithner: GOP will bear responsibility for default

Geithner: GOP will bear responsibility for unprecedented debt default if it doesn't compromise

Pallavi Gogoi, AP Business Writer, On Tuesday May 17, 2011, 8:30 pm EDT

NEW YORK (AP) -- Treasury Secretary Timothy Geithner said Tuesday that if Republicans insist on passage of their budget plan as a condition for approving an increase in the nation's borrowing limit, they will be responsible for the consequences.

Speaking to a New York audience, Geithner said that Republicans would bear responsibility for the first debt default in the nation's history if they insist they will not vote for an increase in the $14.3 billion borrowing limit unless they win approval of a House Republican budget plan.

"If Republicans try to impose that plan on this country as a condition for raising the debt limit, then they will own the responsibility for the first default in our history, with devastating consequences," Geithner said in a speech to the Harvard Club of New York.

Geithner noted that the country reached the current borrowing limit of $14.29 trillion on Monday. He said he has begun deploying a series of bookkeeping maneuvers to avoid a debt default but that he will run out of maneuvering room around Aug. 2.

"As I have said before, Congress must meet its responsibility to protect the nation's full faith and credit by increasing the debt limit," Geithner said.

He said while the borrowing costs on the national debt have remained low, that could change quickly if financial markets begin to doubt America's ability to deal with its financial difficulties.

He said the cost of debt default, something that has never occurred in the country's history, would be as devastating as the financial crisis that hit in 2008.

"As we saw in the fall of 2008, when confidence turns, it can turn with brutal force and with a momentum that is very difficult and costly to arrest," Geithner said. "That is a threat we should pre-empt."

Geithner called on lawmakers to work on a credible deficit-cutting plan that could be accepted by both Republicans and Democrats.

House Speaker John Boehner said again on Monday that Republicans will not support an increase in the debt limit "without serious budget reforms and significant spending cuts."

Republicans have ruled out any tax increases, including any plans to end tax cuts for high earners enacted in 2001 and 2003.

The Treasury Department confirmed that the debt ceiling was reached on Monday with the debt now totaling $14.293 trillion, $25 million under the current ceiling of $14.294 trillion.

Treasury will maintain that level over the next 11 weeks through a series of maneuvers that began Monday when Geithner informed Congress he had halted investments in two pension plans for federal employees.

Treasury will begin reducing the debt holdings in those accounts over the next few weeks to make room for its regular auctions of debt.

AP Economics Writer Martin Crutsinger in Washington contributed to this story.

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The man has lost his mind!

I guess kiting checks makes him sleepy. Cry baby.

[Mr. Big Dog 10,747]

The man has lost his mind!

How so? He makes a very valid point. The GOP has been spending on credit for years. Bills ought to be paid or our economy and with it the global economy will go down the drain in no time at all. The Great Recession would be a mild downturn compared to what awaits if the US defaults on it's debt. And there's one party that is sitting there not wanting to pay the bills that they greatly helped incur.

[^_^ 5,021]

There will not be a default because the GOP will raise the debt ceiling. And they will do it a bunch more times, too. Just you watch.

[Vi-Jay 218]

How so? He makes a very valid point. The GOP has been spending on credit for years. Bills ought to be paid or our economy and with it the global economy will go down the drain in no time at all. The Great Recession would be a mild downturn compared to what awaits if the US defaults on it's debt. And there's one party that is sitting there not wanting to pay the bills that they greatly helped incur.

then they will own the responsibility for the first default in our history

He sounds like a teenager giving mom and dad an ultimatum.

Can't blame him I suppose, all the other kids already have the new Nike's and his are 2 months old.

There will not be a default because the GOP will raise the debt ceiling. And they will do it a bunch more times, too. Just you watch.

Well, maybe. Is there a way to shrink the size of the thumb to a maybe sized thumb?

Edited May 18, 2011 by Vi-Jay

[Obama 2012 1,714]

How so? He makes a very valid point. The GOPWashington as a whole has been spending on credit since WWII for years. Bills ought to be paid or our economy and with it the global economy will go down the drain in no time at all. The Great Recession would be a mild downturn compared to what awaits if the US defaults on it's debt. And there's one party that is sitting there not wanting to pay the bills that they greatly helped incur.

Fixed.

On the topic though. F- Geitner. He's one of the ones like Larry Summers, Henry Paulson, and Alan Greenspan who should be in prison for what they had a hand in every part in causing to happen with the economy in the last 15 years or so.

There will not be a default because the GOP will raise the debt ceiling. And they will do it a bunch more times, too. Just you watch.

Unfortunately as long as the FED runs the show, the debt ceiling will continue to go up and the future of the US will be owned by the 'wealthy' from the US and Abroad.

[Mr. Big Dog 10,747]

then they will own the responsibility for the first default in our history

He sounds like a teenager giving mom and dad an ultimatum.

There's nothing teenager like about that statement. It's a rather factual statement.

[Vi-Jay 218]

"As I have said before, Congress must meet its responsibility to protect the nation's full faith and credit by increasing the debt limit," Geithner said.

Borrow more money to make payments on the existing debt. Does anyone know if he has a gambling addiction?

"If Republicans try to impose that plan on this country as a condition for raising the debt limit, then they will own the responsibility for the first default in our history, with devastating consequences," Geithner said in a speech to the Harvard Club of New York.

Party line rhetoric in an attempt to make the GOP solely responsible for the team (including Reps and Dems)effort that created the problem. Sensationalism.

Geithner called on lawmakers to work on a credible deficit-cutting plan that could be accepted by both Republicans and Democrats

He knows Biden is working on it. Reid was shrewd when he allowed the plan inside. Scapegoat provided by GOP.

[scandal 951]

How so? He makes a very valid point.

He does.

House Democrats should be following a two track strategy over the next few months:

(1) Negotiate with Republicans in good faith to make every reasonable effort to get enough votes to pass a debt ceiling increase. If that means conceding some reasonable ground to the GOP, that's fine. Compromise is fine, particularly if it leads to things we want anyway like reduced spending on programs that both parties can agree to.

(2) Bring a floor vote on a debt ceiling increase bill by no later than a few weeks before the latest deadline Geithner has estimated - probably around mid July. All Democrats will vote for it. If the GOP kills the vote and consequently the catastrophe strikes, it will all have been well recorded and documented just who did what and said what and voted on what. I sure hope it doesn't come to the catastrophe and my betting is that it won't - the GOP will turn chicken. But in case they really want to bring the whole thing crashing down let's make it patently obvious just who is to blame.

[Pooky 3,367]

(1) Negotiate with Republicans in good faith to make every reasonable effort to get enough votes to pass a debt ceiling increase. If that means conceding some reasonable ground to the GOP, that's fine. Compromise is fine, particularly if it leads to things we want anyway like reduced spending on programs that both parties can agree to.

Trouble is, no-one in Washington understands the concept.

[Usui Takumi 1,562]

Trouble is, no-one in Washington understands the concept.

How so?