US Congress will raise debt limit: Geithner

Congre-ssional Republicans have assured President Barack Obama that they would not hold the US economy hostage over raising the debt ceiling, Treasury Secretary Timothy Geithner said on Sunday.
But Republicans appearing on television news shows insisted they would not support an increase of the $14.3 trillion borrowing limit without an accompanying deal to rein in future deficits.
"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner told ABC's "This Week with Christiane Amanpour."
"They recognise it and they told the president that on Wednesday in the White House and I sat there with them and they said, 'We recognise we have to do this and we're not going to play around with it, because we know the risk would catastrophic.'" After Congress approved a deal last week to fund the government through September, US lawmakers are now focusing on the looming debt limit battle and a July 8 final deadline that could halt Treasury borrowing. As of Thursday, the Treasury was just $76 billion below the limit.
The Treasury estimates that the federal government will reach the borrowing limit by May 16, prompting the Treasury to take some extraordinary cash flow measures, such as dipping into government pension funds, that could delay the day of reckoning for up to eight more weeks.
But failure to raise the debt by July 8 would likely cause the United States to begin defaulting on obligations such as Social Security payments and ultimately, interest payments on Treasury debt, Geithner warned. This would devastate investor confidence in the United States and throw financial markets back into crisis, he said.
Geithner said it might not be possible to cut a deal on future spending by the debt limit deadline, so Congress may need to approve a stand-alone increase.
"I think you can do these things in parallel," he told NBC's "Meet the Press." "But if by the time we need to raise the debt limit, we haven't worked all that out, Congress still has to raise the debt limit."
US Rep. Paul Ryan, who heads the House Budget Committee, was one of several Republicans saying on Sunday that a debt limit could only be reached as part of a comprehensive deal on future spending.