Geithner staying in office for now; warns of debt ceiling impasse

Web Exclusive
July 01, 2011

Text and photos by Ted Regencia

To read the Xinhua English version of the story please click here

CHICAGO — U.S. Treasury Secretary Timothy Geithner said Thursday he is keeping his post for the “foreseeable future,” telling an audience in Chicago that he wants to continue helping President Obama solve the country’s economic woes, on top of which is the budget negotiation that would raise the debt ceiling and prevent the country from defaulting.

“I live for this work. It’s the only thing I’ve ever done. I believe in it. We have lots of challenges in the country, I’m going to do it for the foreseeable future,” Geithner said when asked by former U.S. President Bill Clinton. Clinton hosted a two-day economic summit here.

Earlier, Bloomberg News reported that Geithner will resign as soon as the Obama administration and Congress reach a deal on raising the U.S. debt ceiling.

“People are worried, or interested, because you know, I have a family. My son’s going back to New York to finish high school and I’ve been commuting for a while, but I’m gonna be doing this for the foreseeable future,” Geithner said.

Speaking about the contentious issue that’s dominating Washington D.C., Geithner urged Republican lawmakers to reach an agreement with President Obama to raise the debt ceiling, warning that failure to do so would be catastrophic to the American economy.

“If Congress doesn’t act…then what will happen is interest rates will rise, we’ll have to pay more to borrow if we’re still able to borrow,” Geithner said adding that it will be “unthinkably damaging to the economy” much more than the great recession.

As it is now, the U.S. has to borrow 40 cents for every dollar it spends, Geithner said.

“So Congress has no choice but to pass this. And I’m sure that they will. But you know, we’re hoping we can negotiate a long-term fiscal sustainability plan. It will be good for the economy,” he added.

Clinton agreed which Geithner’s assessment saying the the U.S. needs to act immediately.

“Voting to raise the debt limit is voting to honor the obligations we have on the decisions that have already been made,” Clinton said.

He pointed out that without a resolution to the debt ceiling problem, the government will be forced to further increase spending.

“This is a way to force us to increase spending, because interest rates will increase, and of the dollar you pay in taxes, a higher percentage will go to service the debt and a smaller percentage will go to green energy, to manufacturing, to building jobs, to community financial institutions, to education, to healthcare,” Clinton said in explaining the necessity to raise the debt ceiling.

Neera Tanden, an executive of the Center for American Progress and a former aide Obama, said that at present there is “concern in the country” whether Washington can lead and resolve the controversial budget negotiation.

Tanden said it is “disconcerting” that while Obama is “willing to come to the table” and negotiate, Republican leaders in Congress is walking away from the president.

“We really need everybody to be adults and to show leadership and actually show that you know, people can rise above partisan politics and their own personal gain to actually solve America’s problems. And I think that would be instrumental in inducing confidence as well,” she said.

Republican leaders in Congress said it will only vote to raise the debt ceiling if the Obama administration agrees on making cuts in government spending. In return, President Obama said he will make the cuts as long as the Republicans agree to raise taxes on some luxuries of the most wealthy Americans, something that the opposition rejected outright.

Tanden pointed out that large companies must be willing to share some of the responsibility in helping the country recover from the deep recession.

“We didn’t get into this problem because of the middle class, we shouldn’t solve it on the backs of the middle class,” said stressed.

Steve Villano is chairman and CEO of Encorps, a San Francisco-based company that helps train professionals become math and science teachers. He said he would like to “see a little bit more certainly and stability” in the economic leadership in Washington D.C.

“I think that’s what you saw by all participants here at this Clinton Global Initiative is that we are certain about our future together. We are certain that we want this to be a better world for our children,” Villano said.

The Clinton Global Initiative (CGI) America summit was organized by the former president to help the U.S. domestic economy recover from the recession and cut down the high unemployment rate. It is modeled after a similar program he implemented in 2005 to help poor countries around the world.

On Thursday, he announced that the two-day event secured “commitments” from various groups to fund and implement programs that will create 124,000 jobs, provide more than 364,000 people with access to job training, and support entrepreneurs with US$265 million in investments or loans this year and in 2012.

Since 2005, 300 million people in 180 countries and implemented projects in excess of US$63 billion according to the organization.

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