Treasury Secretary Timothy Geithner on Tuesday tried to reassure nation that President Barack Obama and Republican lawmakers will agree on a plan to whittle down the federal government's massive budget deficits over the next decade.
Geithner also downplayed an unprecedented warning that the government risks losing its coveted debt rating if the two parties can't reach a deal.
In an interview on CNBC, Geithner said he disagrees with Standard & Poor's decision to lower its long-term outlook for the federal government's fiscal health. The credit agency on Monday warned the government could lose its top credit rating in the next two years if lawmakers fail to come up with a long-term plan to bring down the federal deficit.
"We are not going to get behind this problem; we're going to get ahead of it," Geithner said.
The U.S. government is projected to run a record $1.5 trillion deficit this year, marking the third straight year that the deficit topped $1 trillion. But so far, S&P sees little chance that the White House and Congress will agree on a deficit-reduction plan before the November 2012 elections, and the rating agency doubts that any plan would be in place until 2014 or later.
Obama and Republicans in Congress have proposed cutting $4 trillion from future deficits over the next 10 to 12 years. However, they disagree on how to do it.
The White House wants to reduce the deficit through spending cuts and by ending the Bush-era tax cuts for the wealthy.
Republicans reject that, calling it a tax increase. They want to narrow the deficit largely by overhauling Medicare and cutting spending elsewhere.
The clash over how to cut future deficits has put a critical decision _ whether to raise the nation's borrowing ability _ in limbo.
Geithner has informed Congress that the government will reach its $14.3 trillion debt ceiling no later than May 16. He can manage to keep the government running until about July 8 by juggling funds. But after that, the government would not be able to pay its bills and it would default on the nation's debt.
Geithner on Sunday said Republican leaders have privately assured the Obama administration that Congress will raise the government's debt limit to avoid an unprecedented default.
But Paul Ryan, R-Wis., the chairman of the House Budget Committee, said there was no guarantee Republicans would agree to increase the debt ceiling without further limits on federal spending.