Tim Geithner: The US Will Not Lose it’s AAA Credit Rating

United States Treasury Secretary Timothy Geithner spoke with FOX Business Network about Standard & Poor’s (NYSE:MHP) lowering its outlook on the US, suggesting a downgrade of the country’s credit rating could come in the next couple of years. Geithner said there is “no risk” that the United States will lose its AAA credit rating and Congress “is going to pass the debt limit” and “there is no reason Congress won’t raise it, they always raise it.” Geithner went on to say he can understand why there is such a lack of confidence in the economy because “Washington is a hard place to read” and “it’s hard for people to look past the political rhetoric and try to understand whether the leadership is going to take the steps necessary to get ahead of this problem.”

On whether there is a risk the United States could lose its AAA credit rating:

“No risk of that. If you listen you see the leadership of the United States of America recognizing this is the right thing to do for the economy. We have to put in place reforms that bring down our long term deficits in ways that will help bring future growth.”

On whether Congress will raise the debt ceiling:

“Congress is going to pass the debt limit. They recognize they have to do that. The leadership have made it clear they are going to do that. They are not going to play around with that. You don’t want to call into question the credit worthiness of the United States of America.  It’s about trust and confidence. The hard thing and the important thing to do is to bring people together, and try to put in place some targets for deficit reduction, targets for savings, time frame for achieving those, and an enforcement mechanism to make sure they happen.”

On how much Congress will raise the raise debt ceiling:

“That’s the judgment Congress has to make and it’s just about how often they want to vote for this. We are the only country in the world that does this; the debt limit that is authorized is just to give us the chance to borrow to finance commitments Congress has already made. There is no reason Congress won’t raise it, they always raise it. They have to decide how often they want to raise it. There is no reason why they have to put their members through the torture of having to do it frequently.”

On whether Congress should make small incremental increases to the debt ceiling:

“The would be a ridiculous way to run the country. I can’t imagine that would be the case.”

On why S&P has such a  pessimistic outlook on the US economy:

“People who look at the United States; people who run businesses across the country, investors around the world, it’s understandable. Washington is a hard place to read. It’s hard for people to look past the political rhetoric and try to understand whether the leadership is going to take the steps necessary to get ahead of this problem.”

On whether in a partisan government there is room for good faith negotiations:

“I think there is. Both sides recognized to do this it has to be bipartisan. Our challenge is to lock in what we agree on. We have very different visions about what the right growth strategy is for the country going forward but even within those disagreements is both sides saying the right thing for the economy right now is to lock in some reforms that achieve concrete savings with a way to enforce those limits so Congress is living within its means.”

On how much he would raise the debt ceiling:

“If it were up to me, knowing you want the world to know that our commitment will never be in question, you would do it for as long as possible. Even under Paul Ryan’s budget plan, you would have to raise the debt limit by 2 trillion dollars to get through this.”

On how the government can restore faith in the economy:

“People are going look beyond what we say and see what we do. That’s the important test. That would be a very strong signal to the rest of the world that the United States of America will do the right thing as we always do. W e have a great tradition of rising to these challenges. Republicans want to take advantage of this moment to put something in place that will be good for the economy. We all agree future growth requires we begin to put reforms in place that will help make sure we are living within our means. We have to do it in a gradual, balanced way.”

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