WASHINGTON Congressional Republicans have assured President Barack Obama that they would not hold the economy hostage over raising the debt ceiling, Treasury Secretary Timothy Geithner said on Sunday.
But Republicans appearing on television news shows insisted they would not support an increase of the $14.3 trillion borrowing limit without an accompanying deal to rein in future deficits.
"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner told ABC's "This Week with Christiane Amanpour."
"They recognize it and they told the president that on Wednesday in the White House and I sat there with them and they said, 'We recognize we have to do this and we're not going to play around with it, because we know the risk would catastrophic.'"
After Congress approved a deal last week to fund the government through September, U.S. lawmakers are now focusing on the looming debt limit battle and a July 8 final deadline that could halt Treasury borrowing. As of Thursday, the Treasury was just $76 billion below the limit.
The Treasury estimates that the federal government will reach the borrowing limit by May 16, prompting the Treasury to take some extraordinary cash flow measures, such as dipping into government pension funds, that could delay the day of reckoning for up to eight more weeks.
But failure to raise the debt by July 8 would likely cause the United States to begin defaulting on obligations such as Social Security payments and ultimately, interest payments on Treasury debt, Geithner warned. This would devastate investor confidence in the United States and throw financial markets back into crisis, he said.
Geithner said it may not be possible to cut a deal on future spending by the debt limit deadline, so Congress may need to approve a stand-alone increase.
"I think you can do these things in parallel," he told NBC's "Meet the Press." "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."
HIGHER CEILING WITH CUTS, NOT WITHOUT
Representative Paul Ryan, who heads the House Budget Committee, was one of several Republicans saying on Sunday that a debt limit could only be reached as part of a comprehensive deal on future spending.
"In addition to raising the debt limit we want financial controls, we want cuts in spending accompanying a raising of the debt ceiling. And that is what I believe they (Republican congressional leaders) told the president," Ryan said.
The Republican-led House on Friday approved a plan authored by Ryan to slash spending by nearly $6 trillion over a decade and cut benefits for the elderly and poor. Obama has offered a competing vision to curb deficits by $4 trillion over 12 years.
Some Republican freshmen backed by the conservative Tea Party movement also said they would not support a stand-alone debt ceiling plan.
"They are pushing for a single subject vote, a clean debt ceiling vote and I'm not for that," said Rep. Steve Southerland of Florida. "Look, we've got to have some guarantees going forward -- caps, some guarantees that if we raise that debt ceiling, we get this economy on a trajectory where we service our debt."
Geithner claimed that, politics aside, there is less difference than many claim between the deficit-cutting objectives of the Obama administration and Republicans.
"What we would like Congress to do is, before we get too far into June ... 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," he said on "Meet the Press".
Republican Tom Coburn, a member of a bipartisan "gang of six" senators working on a spending-cut plan based on the work of last year's deficit commission, also said he thought there was room for some middle ground.
"There is a good chance that we are going to come up with a bipartisan agreement that people can swallow," he said. "I think there is a good likelihood that we can get there."