MR. GREGORY:
Good morning. Millions of Americans will rush to file their tax return by tomorrow's deadline at a time when taxes are at the heart of the budget debate here in
Washington
. The spending fight and high gas prices, with a national average now of $3.83 a gallon, top of mind for the president's chief economic adviser, Treasury Secretary
Tim Geithner
. I sat down with him yesterday at the
Treasury Department
. There's so much to get to. I want to begin with the next big fight here in
Washington
. The government nearly shut down because this year's budget. Now there's the decision to raise the
credit limit
on
America
's credit card, with the debt at $14 trillion. That is, raising the debt ceiling. Will the president agree, as
Republicans
demand, to tie spending cuts to an agreement to raise the debt ceiling?
SEC'Y TIMOTHY GEITHNER:
David
, let me tell you how we're going to do this.
Congress
is going to have to raise the debt limit. They understand that. That's absolutely essential to preserve the creditworthiness of the
United States of America.
You know, we're a country that meets its obligations, and we have to meet our obligations, and they recognize that. I heard -- in fact, I heard the
leadership
tell the president that again on Wednesday.
MR. GREGORY:
But you hear so many
Republicans
saying, "No, no, there's got to be a deal here."
SEC'Y GEITHNER:
But, but, but as we do that, in parallel to that, we're going to work with the
Republicans
and
Democrats
and try and get people to come together on a long-term plan to bring our fiscal position back down towards balance so we're living within our means again. We have to do both those two things. And we're going to work very hard again to take advantage of this opportunity to get
Democrats
and
Republicans
to come together.
MR. GREGORY:
But does there have to be a link?
SEC'Y GEITHNER:
I think you can do these things in parallel. And I'll -- let me say it this way. You know, we're going to move forward, and we want -- again, we want
Congress
to put in place a comprehensive framework, a balanced framework, that can reduce our long-term deficits. And we're going to work hard to do that. 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. Again,
leadership
recognize that. They don't -- they know...
MR. GREGORY:
Or, or else what? Because they say a lot of your warnings are overblown. Those like Senator
DeMint
of
South Carolina
say those warnings about, you know, the catastrophe are overblown.
SEC'Y GEITHNER:
Oh, that's absolutely not the case. And again, I think -- I've spent a lot of time with
Republicans
and
Democrats
on this -- you know, I saw the
Senate Finance Committee
last week -- and they absolutely understand the stakes in this. And the
leadership
understand that you can't play around with this, you can't take it too long. And those people up there who are telling people that you can take this to the brink because it gives them some leverage, they're going to own the responsibility for the risk that creates for the
American economy
.
MR. GREGORY:
And what are the stakes?
SEC'Y GEITHNER:
Well, again, if you just think of it this way, if you allow people to start to doubt whether the
United States of America
will meet its obligations, that would be catastrophic, and we can't take that risk. But again, the responsible people up there understand that, and I'm very confident they'll do this.
And I
heard them say that, that to the president on Wednesday. Again, they said that, "We, we recognize we can't play around with this."
MR. GREGORY:
Do you think this risks another shutdown?
SEC'Y GEITHNER:
I don't think so. Again, I think if you, if you listen carefully -- I know there's a lot of politics in the moment, but if you listen carefully to what people are saying, a very important thing has happened. You've seen the Republican
leadership
say we need to try and cut about $4 trillion from our deficit over about 10 years. You saw a bipartisan fiscal commission the president established lay out basically the same target. And the president of the
United States
on Wednesday laid out a balanced, responsible plan that achieves about the same level of deficit reduction over about the same period. We take a little longer
because we want to
go a little more gradually. But when you have
leadership
of
Republicans
and
Democrats
saying that, "This is the right thing to do for the economy now. We all agree on how much you have to do," that's very important. And what we like to --
Congress
to do is, again, before we get too far into June we want
Congress
to agree on concrete targets, deadlines, timelines, and an enforcement mechanism that will force
Congress
to live within its means over the next three to five years.
MR. GREGORY:
OK, but one more on the debt limit. When he was
Senator Obama
, he voted against raising the debt limit in
2006
.
SEC'Y GEITHNER:
He did. And he said...
MR. GREGORY:
And he said, he said at the time that the debt problem was a, quote, "failure of
leadership
, and Americans deserve better." Look, the debt has gone up 35 percent during his presidency. Is that also a failure of
leadership
?
SEC'Y GEITHNER:
You know, you, you heard him say this week that that was a mistake. He recognized that's a mistake, and he recognizes that's not something you can play politics with. You know,
Steny Hoyer
said in the -- on the floor something similar earlier this year. He said that, "I thought this was something you could demagogue. I was wrong at that point. Not something you can play politics with." Again, that it's -- this is a absolutely critical thing for people to understand. This is about the trust and confidence in the
American people
, and the world is watching us. Markets around the world are watching
Washington
to see whether this political
leadership
,
Republicans
and
Democrats
, understand that we need to
get on with it
and start to bring down the long-term deficits. And, of course, as we do that, as we work that out,
Congress
will pass the debt limit.
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