Treasury chief confident Congress will raise debt limit

WASHINGTON -- Treasury Secretary Timothy Geithner said Republican leaders have privately assured the Obama administration that Congress will raise the government's borrowing limit in time to prevent an unprecedented default on the nation's debt.

But a top Republican pushed back Sunday and said there was no guarantee the GOP would agree to increase the $14.3 trillion debt ceiling without further controls on federal spending.

Geithner told ABC's "This Week" and NBC's "Meet the Press" that Republicans told President Barack Obama in a White House meeting last Wednesday that they will go along with a higher limit.

"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner said in the interviews taped Saturday and aired Sunday.

He said the leaders told Obama that they couldn't play around with the government's credit rating. "They recognize it, and they told the president that on Wednesday in the White House," Geithner said.

But Rep. Paul Ryan, the chairman of the House Budget Committee, said it's essential to address future borrowing at the same time.

"We want cuts in spending accompanying a raising of the debt ceiling. And that is what we have been telling the White House," Ryan said on CBS' "Face the Nation."

Ryan, R-Wis., wrote the 2012 budget blueprint that the House passed on Friday. The plan for the budget year that begins Oct. 1 cuts $6.2 trillion over the coming decade and transforms Medicare for people under 55.

The government is projected to reach its borrowing limit no later than May 16 and risks going into an unprecedented default Geithner has said he will have a few options he can use that would delay a possible government default until about July 8.

The looming credit crunch has heightened the tensions between the administration and Republicans in Congress.

A last-minute deal last month between the White House and GOP avoided a government shutdown on a budget running through September.

But Republicans are seeking additional savings in the budget for next year, and say unless they get them, they won't support raising the debt ceiling.

On Friday, Obama predicted that Congress would raise the debt ceiling, but he acknowledged that he would have to offer more spending cuts in the budget to get a deal. Later, Obama's spokesman said a debt ceiling vote could not be contingent on upcoming negotiations over the budget.

If the debt ceiling is not raised, Obama told the AP that it would undermine the solvency of the government, roil financial markets and potentially "plunge the world economy back into a recession."

Former Federal Reserve chairman Alan Greenspan said the country's financial crisis is "so imminent and so difficult that I think we have to allow the so-called Bush tax cuts all to expire."

The House budget blueprint would extend those tax cuts at all income levels.

"I think that what we have to become aware of is that if we allow taxes to fill in the holes here, we are going to find that we are getting ever closer to the type of economies that exist in Europe, which are very heavily laden and not rapidly growing the ways ours can," Greenspan said on NBC.

Assessing the current economic state, he said "there's a lot of headwinds that are hitting the economy now and slowing it down, and we are in a soft patch."