Treasury Secretary Timothy Geithner speaks at Council on foreign relations in New York, April 26, 2011.
Credit: Reuters/Mike SegarBy Kristina CookeNEW YORK | Wed May 26, 2010 3: 32 pm EDT
NEW YORK (Reuters)-Congress and the White House could buy the time to take the difficult decisions needed to reduce the US budget gap if they could agree on a broad framework to reduce deficit, Treasure Secretary Timothy Geithner said on Tuesday.
The deficit is projected to reach 1.4 trillion dollars this financial year and the debt of the country at 14 trillion dollars, lawmakers and the Obama administration scrambling to find a way to telegraph to the world that they are serious about tax reform.
Geithner claimed a broad plan which envisaged a deficit-cutting goals and included law enforcement mechanism could hold the confidence of investors in u.s. government debt, allowing to settle their differences later on with the point for cutting politicians.
"It is very important to act now, before a crisis forces action," he said at the Council on foreign relations.
The White House has asked for 4 trillion dollars in deficit reduction will be phased in over a dozen years or less, while the Republicans who want to cut 4.4 trillion dollars over the next decade.
However, they remain apart on the details.
The Republican plan would lower corporate taxes, while slashing costs for healthcare for the poor and the elderly. The views of the White House the Republican spending cuts as too draconian and wants to give tax breaks for the wealthiest Americans expire.
Geithner said the agreement between Republicans and Democrats on the scale of the cuts were necessary in the budget that gives the country an opportunity to establish a financial framework.
"If we are able to legislate ... a broad framework that locks in reforms over a multi-year period, limiting the ability of future conferences and executive officials to live in larger deficits, then we do not need to resolve immediately all the basic options that separate still so "Geithner said.
Setting a long-term but vague plan-deficit reduction will enable President Barack Obama to make the question of how to reduce the deficit issue a central re-election campaign next year.
In particular, I was able to counter Republican plans to make deep cuts to the popular program health care laws of the u.s.a. for the elderly at a more moderate approach. Polls show voters overwhelmingly oppose changes Medicare in the U.s.
CHREOS CEILING LIMIT ARGALEIOYS
The debate on how to get the country's fiscal house in order to come to a head with Republicans threatening to not allow the Treasury to borrow more, unless the Government makes deep cuts in spending.
The Ministry of finance under the Government of the UNITED STATES would reach a legal limit to $ 14.3 trillion debt by 16 May. He said this could employ emergency measures in order to give the Government some eight more weeks of lending room, after which it will start automatically for loans and other obligations.
Geithner has warned of disastrous consequences if the Court is unable to raise the limit.
The business community and Wall Street have also sound the alarm bells. Debt Advisory, which includes executives from JPMorgan Chase and Goldman Sachs, said Treasury in a letter released Tuesday that a failure to raise the limit could cause another financial crisis.
Geithner on Tuesday repeated that he was confident Congress will do the right and to raise the debt ceiling.
(Reporting by Kristina Cooke, by Mark Felsenthal and Rachelle Younglai. Edit by Jan Paschal)
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