News / USA

Geithner Warns US 'Running Out of Time' on Debt Issue

Treasury Secretary Timothy Geithner makes remarks after a meeting with Democrats about the debt limit, July 14, 2011
Treasury Secretary Timothy Geithner makes remarks after a meeting with Democrats about the debt limit, July 14, 2011

Top U.S. financial officials are issuing a new round of warnings about the potential catastrophe that awaits if lawmakers fail to raise the country's debt limit by August 2.

Treasury Secretary Timothy Geithner told reporters Thursday the country is "running out of time" to raise the $14.3 trillion borrowing limit.

He said Washington needs to meet its financial obligations and "it's time we move."

Earlier, Federal Reserve Chairman Ben Bernanke told a Senate committee any failure to raise the debt limit would have a "calamitous outcome."  He warned excessive spending cuts could damage the fragile economic recovery.

Talks stalled again

Top lawmakers are scheduled to meet with President Barack Obama later Thursday at the White House as the debt talks enter a fifth day, stalled over sharp disagreements about the need to raise taxes.

The Senate's top Democrat Thursday lashed out at one of the lead Republican negotiators.  Senate Majority Leader Harry Reid called House Majority Leader Eric Cantor "childish" and said he should be excluded from further talks.  On Wednesday, Cantor accused the president of storming out of a negotiating session.  Cantor himself had walked out of earlier talks with Vice President Joe Biden.

The top Republican in the Senate, Minority Leader Mitch McConnell, criticized the president's stance, telling colleagues his party will "not be reduced to being tax collectors for the Obama economy."

If the borrowing limit is not raised by August 2, the U.S. may have to stop payments on some of its obligations.

The Fed chairman said failure to raise the debt ceiling would be a "self-inflicted wound" and would erode global confidence in the United States.

Default consequences

Moody's Investors Service warned Wednesday that the U.S. risks losing its top credit rating if lawmakers fail to reach a deal that increases the debt limit and decreases the deficit.  A downgraded U.S. bond rating would likely lead to higher interest rates for U.S. loans.

Bernanke said a downgrade could lead to a "vicious cycle" in which higher interest rates make the country's debt increasingly difficult to pay down.

There are also growing calls from businesses and banking firms for a solution.  The head of one of the biggest private U.S. financial firms Thursday told reporters it is "imperative that the debt ceiling be fixed."

JP Morgan Chase Chief Executive Jamie Dimon said it would be irresponsible for the country to default on its debt because the result could be catastrophic.

A Chinese credit rating agency said Thursday it has placed U.S. sovereign debt on a negative watch.  Dagong Global Credit Rating Company says it will downgrade U.S. credit ratings "if there is no significant change in its repayment ability within the period of observation."  China is the biggest buyer of U.S. sovereign debt.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Christmas Gains Popularity in Vietnam

Increasingly wealthy Vietnamese embrace holiday due to its non-religious glamor, commercial appeal More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid