Geithner Calls Two-Stage Rise of Debt Ceiling 'Nonstarter'

By BILL TOMSON U.S. Treasury Secretary Timothy Geithner said the latest "two-stage" proposal being considered by Republicans to lift the federal debt ceiling is a non-starter because it can't garner enough Democratic support to pass Congress. Mr. Geithner, speaking on CNN's "State of the Union," said the GOP idea would be just a short-term solution to the current budget impasse and that President Barack Obama's "preference, still" is to reach a bigger agreement to reduce the budget deficit and raise the government's 14.29 trillion borrowing <a href="www.christianlouboutinoutletcheap.com"><stro ng>christian louboutin clearance</strong></a> limit through 2012. The president is still in talks with House Speaker John Boehner (R., Ohio) over how to lift the debt cap in time to avoid a government default, Mr. Geithner said. The latest Republican proposal would raise the debt limit in two phases, with a smaller increase of about 1 trillion immediately, which would carry the government through the end of this year, matched by a similar amount of spending cuts. The second increase would depend on a deficit-reduction commission's recommendations. The commission would recommend a set of changes to safety-net programs and a tax overhaul in hopes of closing the deficit by as much as another 3 trillion. Once that package was adopted, the debt ceiling would be raised again in January 2012. Treasury Department officials have warned that without an increase to the debt limit by Aug. 2, the government could run out of cash to pay its bills, which include Social Security benefits, military pensions, contractor payments, and interest on its debt. Credit-rating firms have threatened to lower their top triple-A rating on U.S. debt if the White House and Congress don't come to an agreement to raise the debt ceiling and reduce the government's long-term budget deficit. The White House opposes the Republican two-step solution because <a href="www.christianlouboutinoutletcheap.com"><stro ng>christian louboutin outlet</strong></a> it would require lifting the debt ceiling again in a few months. "We...cannot leave the threat of default hanging over the American economy for a longer period of time," Geithner said. He said he expected the White House and Congress to reach an agreement to raise the debt limit, calling default "unthinkable." Meanwhile, House Speaker Boehner (R., Ohio) said Sunday it is too early to know if a bipartisan deal to raise the debt ceiling is possible. Mr. Boehner, in an interview on Fox News Sunday, said if he cannot come to agreement with House Democrats on a deal, then Republicans will go it alone. "I'm trying to find a common ground that's doable in the time we have remaining," Mr. Boehner said of a deficit-reduction deal. He said he had agreed to 800 billion in revenues through changes in the tax code in an agreement he tried to strike with President Obama. "Last Sunday, I thought there was an agreement of 800 billion in new revenue coming from a flatter, fairer tax system," Mr. Boehner said. The <a href="www.christianlouboutinoutletcheap.com"><stro ng>christian louboutin outlet cheap</strong></a> so-called grand bargain collapsed Friday night when Mr. Boehner walked away from negotiations. The White House has said that plan is still on the table, and but Mr. Boehner said a better path forward is for him to work with House and Senate leaders. "It may be pretty hard to put Humpty Dumpty back together again, but my last offer is still out there," he said of the deal with Mr. Obama. He added, "I've never taken my last offer off the table and they never agreed to my last offer." House Republican leaders plan to update their members on the status of talks to raise the debt ceiling at 4:30 p.m. Eastern time Sunday, a top GOP aide said. It wasn't immediately clear whether Mr. Boehner planned to have a framework in place for how to resolve the impasse. On a similar conference call on Saturday afternoon, Mr. Boehner told lawmakers that he hoped there would be substantial progress on a framework before Asian financial markets open Sunday night Eastern time. &mdash;Carol Lee and Corey Boles contributed <a href="http://436100.info/view.php?id=12708"><strong>The Earth of Womens Watches - Free Articles Directory ...</strong></a> to this article.