US Treasury Secretary Tim Geithner urged Congress on Sunday to raise the federal debt ceiling before the August 2 deadline while Republican leaders in Congress affirmed that a deal is not possible with the White House.
Geithner told CBS News that the August 2 deadline is not “artificial,” saying that Congress does not need more time to reach a deal “I am very confident they are going to do what is necessary.”
The new director of the International Monetary Fund (IMF) Christine Lagarde affirmed during an interview with ABC News that it would be a “real shock” and “bad news for the US economy” if the White House and Congress did not reach a deal to raise the debt ceiling by August 2.
“I would hope that there is enough bipartisan intelligence and understanding of the challenge that is ahead of the United States, but also of the rest of the world”, she added while noting that if a deal is not reached interest rates could rise and stock markets to fall.
Commenting on the budget negotiations with the White House, Senate Minority leader Mitch McConnell told Fox News that a deal to cut USD four trillion and raise the debt ceiling is not possible.
“It is because everything they have told me is that to get a big package would require big tax increases in the middle of an economic situation that is extraordinarily difficult with 9.2 percent unemployment, we think it is a terrible idea”, added the Republican leader.
But the White House announced that President Barack Obama and Vice President Joe Biden will renew on Sunday meetings with Congressional Leadership in the Cabinet Room “to discuss the ongoing efforts to find a balanced approach to deficit reduction”.
Expected to attend this meeting House Speaker John Boehner, Senate Majority leader Senator Harry Reid, McConnell and Democratic leader Representative Nancy Pelosi and other congressional leaders.
McConnell reaffirmed that his goal is to make Obama a one-term President, saying “that is my single most important goal, along with ever active Republican in the country”.
“But that is in 2012. Our biggest goal for this year is to get this country straightened out, and you cannot get this country straightened out if you do not do something about spending, about deficit, about debt and get this economy moving again”, he added.