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And hello again from Fox News and Washington.
It is now nine days and counting until the US hits the -- -- one.
With the collapse of talks about a grand bargain can on the nation's leaders come up with a last -- plan to raise the debt ceiling before August -- -- We'll -- was speaker John Boehner in a moment but first another key figure at the center of the talks.
Treasury Secretary Tim Geithner and secretary -- welcome to FOX News Sunday.
-- congressional Republicans.
Are working on the two stage plan that would cut.
It's over a trillion dollars in spending right away.
And raise the debt ceiling into early next year then there would be a mechanism for more -- that if approved.
The debt ceiling would be rays past the 2012 election.
Will the president sign not into law.
Crystal -- they were trying to do -- the president trying to do is first and most important we have to lift this threat of default.
From the economy.
For you know for the next eighteen months we we have to take that threat.
Off the table.
Through the election.
But we also want -- try to make sure we come together and make some tough choices lock in some long term savings -- -- our fiscal house in order.
We need to both those two things so the congress can get back to the business of trying to do things to make economy stronger get more Americans back to work.
So -- for black and about a world called -- -- their plan would the president veto that well again we suspect when except there's two types of plans and table now.
One is the framework that the president and the speaker of the house -- been talking about the last several weeks now.
And that that's -- no there's they're talking still because again both both the president.
And the speaker believes that the best thing we can do is put together.
A very substantial contribution to getting our fiscal house and you're saying that the so called grand bargain is still alive but I wouldn't say it that way -- just saying there's 22 -- before us now one is again at something like that comprehensive.
Entitlement savings secure Medicare Medicaid for the future with tax reform that would generate revenues help us solve this problem.
But there's also some talk about it a plan that senator McConnell and -- -- both put forward.
They would also take the fall off the table and put in place a special committee with special powers to try to -- move legislation to achieve that -- outcome.
Now you can -- from lots of different ways but the two key things are we take default off the table to throw the ball off the table through the election.
And we put in place a framework of tough reforms forces congress act.
Relatives who you know we don't -- fall behind the curve -- this and it's important we not just take the fall off the table but we demonstrate to the world that we can start to make the channel and -- so so.
It's so let me go at this a different way -- plan that would only in guarantee.
-- and a debt ceiling -- early next year.
Makes no sense I mean again and again -- president will be -- makes again and He said he's been very clear about -- -- let me explain why that would be responsible.
I -- you know we started this process seven months ago.
Here we are seven months later we're running out of runway were almost -- the yet I never thought they were taken this -- of the edge and the politics.
In the way.
Chemistry and we'll we'll pay our bills on time it's taken us 67 months.
The idea that we're gonna spend -- another seven months.
Lifting the credit default from the split from the American economy it seems irresponsible approach but -- -- -- -- bad for the economy and we don't think that makes sense and is no reason what we have to do it that way.
But secretary -- here's what I don't understand what you're saying I understand.
Trying to get past quite obvious I don't wanna do this again there are also were some political considerations that is again if if I may ask the questions there.
It is there's some political considerations as well but what you're saying it -- you would ensure.
Hitting the debt ceiling now.
Just to make sure -- don't.
Possibly get the debt ceiling early next year let me say again if you can get up if you've -- -- -- that will -- that kick this can down the road for six months why -- you grabbing on that Michael like.
Prison because we're trying to do something more important again we're -- would not just the -- today.
But the Specter of default in the future you may end and defaulted -- -- we're not been up there may remember that the speaker of the house and senate McCollum an absolutely clear they are not gonna let this country default.
They're not gonna put us in the position where the members of their party who've been threatening to pull some of them praying for to -- really it's remarkable thing.
They're not gonna let that happen I I commend them for that but we're trying to do something more important than just getting to the second we're trying to make sure we can we will lift that's the threat of default.
From the American economy.
For the next eighteen months and we're trying to put in place a framework that forces congress to make some tough choices not just on tax reform and types of savings we need to get our fiscal house in order how.
How do you think the markets and credit rating agencies will react in speaker -- talk them in a few minutes announces a plan.
Short term cuts short term.
Debt ceiling increase with a mechanism for longer cops and longer debt ceiling increase next year.
-- that what the markets are gonna look at minorities have been very clear they're gonna look at not just what are we successfully avoided -- crisis which I'm very confident we will.
But they're gonna look at literally lift the cloud of default off the American economy to go look at the equality of savings.
And reforms we've put in place of the weekend demonstrate to the world and the American people we're gonna go back to live within our means now a member.
From the beginning it's been clear that.
You gonna need Democrats and Republicans in both houses of congress get this done you cannot do it.
With just Republicans in the house because -- He has -- the senate the speaker understands that the senator since -- and that's why as you've heard yesterday.
The leaders of come together to try to figure out today.
What type of arrangement is gonna work get to both houses that the president can sign.
How do you think the markets will react.
In Asia starting this afternoon in the United States starting tomorrow morning if at the end of this day at the end of another weekend.
There's no plan at all we you know you can't ever tell -- -- do so far markets have been very confident that America's gonna do the right thing that's gonna run out of some you know but that at some point to get more worried.
Now again we're very close now to the deadline and the longer.
The politicians take it to more risk we face that people start to look at us and they sort of wonder.
When this place can work again and that and against supporting the leaders demonstrate that they can find a way to make the compromises -- -- make this work.
I want to ask you about one specific part of the negotiations.
Up to this moments the commander's office says that He agreed with you.
On a deal to raise revenue 800.
Billion dollars over the next decade and that the president -- his words moved the -- polls.
During the course of the week by demanding another 400 billion dollars.
Simple -- question.
Did you have an agreement with speaker Boehner last Sunday in a meeting in White House chief of staff bill Daley's office 800 billion dollars in new -- we did not but we -- close.
At that point on that's -- haven't really did not at that at that point on that Saturday.
We were apart on two very important things one is.
What type of revenue we're gonna get through tax reform as an objective that's the thing you mentioned.
But we're also part on the depth of savings.
That speaker Boehner thought we should.
Put -- a deal on on Medicaid for example.
But -- 800 billion figure you had agreed on that you know you always negotiation -- Chris nothing's done until everything's done at that point again we're getting closer but we -- quite done yet.
And again there's still a chance that.
You should -- speaker of course but there's still a chance that.
That may prove the best way to get the votes and and the president believes that if the speaker does that a friend -- like that.
Will be -- to do but we've got options to now the important thing is you keep bringing up the grand bargain.
Well you know again this president has -- believes that the best thing we can do for the economy is to put in place now.
A comprehensive balanced set of savings.
That can demonstrate to the world we can get our fiscal house in order and if we can do that now -- we can get congress back to business trying to figure out how to make the economy stronger in the short term and get more Americans back to work.
I -- you're not gonna wanna talk about this but I'm gonna ask you a straight question and I'm I'm coming on a straight answer the president said Friday He has talked to you.
About what adjustments may have to be made in the case of default.
You're office announced that you met with Fed Chairman Bernanke and the head of the New York Federal Reserve on Friday.
What's your plan.
Heard a full a plan is to get congress or residency not time that's not a -- -- that that's their plan to that's what's always happened we'll have and it's time to.
We do not have the ability Chris.
To protect the American people.
From the consequences of congress not taking that -- the president said that you would discuss what adjustments will have to be made if you go into default and again I wanna -- emphasize just remember this is the United States of America.
Eighty million checks a month there are millions and millions of Americans that depend.
On those checks coming on time.
Not just people -- military.
But people get -- security benefits Medicare Medicaid benefits and we cannot put those payments at risk and we do not have the ability.
To limit the damage on them if congress fails to act in time you have been saying this for months -- I must say it made more sense when you set it in April than when you're saying it in July.
What's your plan it would be irresponsible not have a plan the president says you have a plan what does again we will do everything we can to mitigate Dennis don't be very clear.
Congress will be putting.
Eighty million checks.
At risk of delay and now -- now be responsible.
Everyone who decided who will get paid first ever world we won't Chris every one who's had my job everyone's had the presence job has looked at -- set of questions they had to do this over and over again.
And they've reached the same judgments we've -- which is.
The only option for the country -- I believe that speaker Boehner and semi -- understand this.
There is no other option available and I don't think they're gonna put the American people that the I'm gonna ask one last time and I'm gonna move on.
Have you made plans is to cool got their -- And who won't get their -- Chris -- -- doing the responsible thing but that's something important things to recognize that we do not have the ability only congress has the ability.
To make sure that people get the payments on time only congress has the ability to demonstrate.
-- -- gonna pair bills of the country we're gonna -- or obligations on time.
-- right the president talked about the importance of getting serious about our national debt but I want to look at the record review mister secretary let's put it up on the screen.
In December the president's -- debt commission called for four trillion dollars in costs mr.
Obama didn't endorse any of them.
In January in -- state of the union speech He didn't mention the word -- until 35 minutes in.
In February He proposed a budget that cut the deficit only 400 billion dollars over ten years.
The senate the senate rejected that 97 to nothing and -- April He offered another plan that was so Fuzzy the head of the CBO said we don't.
Meanwhile the secretary Republicans have offered several specific.
Plans to deal with a national that plans that would devastate the economy Dennis that the country because in nearly -- in your opinion but they don't pay at least at -- -- -- the Ryan plan.
They had cap cotton -- did you guys about no plan.
We'll -- that -- that's not fair in April the president -- put out a framework that would do four trillion deficit reduction.
Over roughly the same period of time which does -- opening director said is so Fuzzy He couldn't even -- and He has been spending.
Every day every week since then negotiating with Republican leaders and democratic leaders on a framework that can pass and work now remember why have you had no plan -- -- not -- -- that's not -- I know the Republican leadership says that that is just not -- -- -- the -- that nonpartisan head of the Congressional Budget Office said we can't score a speech -- -- your -- -- The Republican plan that passed the house representatives.
And that Republicans -- from the sent.
Would in the S and into the CBO.
Beneficiaries of Medicare.
To pay 6500 dollars a year or more 6005 and another here in more for Medicare benefits.
And they do today and why are they doing that they're -- they're doing that because.
They want to preserve.
On the speaker just has this but they wanna preserve.
Tax cuts that benefit the top 2% Americans that we simply cannot afford and what they did -- demonstrating their plans and I didn't credit for this.
It if you tried to balance our budget.
With out revenues without tax reform to raise revenues then you are forced to.
Put in place.
Exceptionally harsh cuts not just for Medicare beneficiaries but for Medicaid and remember the this country this country this great nation with -- are great resources today.
One in eight Americans are eligible -- -- today.
40% of Americans born today are born to families eligible for Medicaid.
The idea that you can ask the American people to balance this budget.
On the backs of the ugly and the most vulnerable -- no burden.
Through tax reform on the most fortune Americans.
Is fundamentally unacceptable it's not gonna happen they knew it it's not gonna become law.
And we have made so much progress over the last four months with the Republicans in trying to build consensus for more balanced approach I get the speaker.
A lot of credit for that let's turn.
In the time we have left to the economy last August.
You wrote an op Ed article in the New York Times and the headline is you can see there was welcome to the recovery that was not our headline that was -- New York Times headline deeply unfair the substance lateral well here's what you did say let's put it up again on this great if we can.
Because what you did say is we are on a path.
Back to growth has to go through it those -- your work actually -- to stand by that absolutely.
Actually at that point when I wrote that -- -- The American iron key and the strength and He grew more than 3% average grade of talking about but that week or you work and they'll but it was -- right if you look what happened in America I'm doing well let's look if if I -- -- let's look at the record.
Since President Obama took office the nation has lost a net of two and a half million jobs.
The unemployment rate has jumped from seven point eight to nine point 2%.
The nation gained only 181000.
Jobs in June.
And Goldman Sachs now projects that by the end.
Of 2012 the unemployment rate will still be eight and three quarters percent.
Question that's your idea of the path to growth.
Chris the American economy is still suffering undeniably.
From the tragic.
After effects of the crisis this president inherited.
But we've -- been growing for more than a year and a half.
We have two million to over to me in private sector jobs created since job creation start again faster and more than last two recoveries.
Things are healing it's gonna take more time though.
Growth is slower than we would like and that's why it's so important that we get this budget stuff done in a sensible place because we want congress turned back -- the business.
Of doing things help the economy gets stronger we've got a long way to go there is no doubt about it.
But we are a much stronger position today is a country than we were not just three months ago not just six months -- -- not eighteen months ago.
It'll be a stronger position on the economy today than you work with that -- that -- actually if and it finished.
And a stronger position of the economy today than you were three or four months ago when you're going hundreds of thousands of jobs -- Absolutely because.
With time more Americans are getting back to work.
The economy's growing American -- are investing again exports are getting stronger that's all going well now the growth slowed in the first half of the year slowed because oil prices went up.
We had a lot of bad weather.
Stay local governments are tightening their belts Japan had a catastrophic.
Crisis and those things all -- -- -- slow and this.
Specter of default.
The Republicans approve of the country is hurting the confidence of average Americans and that's quite so important -- take that off the table definitively not just brought a second.
But for the next eighteen months as long as a capitalist.
And when asked about that you talk about growth I want to put up the growth numbers over the last few months and going -- growth GDP growth in the first quarter was one point 9%.
Goldman Sachs has now scaled back its estimate for growth in the second quarter from 2% to one point 5% -- was less than in the first quarter and in the third quarter.
From three and a quarter percent to 2.5.
That's your idea of an economy that's growing stronger.
With the economy still very tough economy and growth slow in the first of the of the reasons we said.
And if congress makes some sense loses right now.
Lifts this cloud of dysfunction of default.
Over the off the American economy and it can turn back the -- of doing things and -- economy stronger but this economy is healing.
It's recovering we're gonna get through this gonna take more time but that's why it's so important as the eyes of the world rawness that congress -- -- -- can come together and make some tough decisions now.
It's eight point eight and three quarters percent unemployment a year more than a year from fifteen months from now is that.
So jive with your recommendation or your analysis -- you Chris it depends on how fast we grow.
That's what -- -- on depends on the confidence.
That the leaders of congress not just Democrats Republicans some protections right now it's -- requests had went on to forecasting but I would say that the the best forecasters in the country say.
That they believe growth is gonna get stronger going forward I think that's likely -- congress -- and the decisions.
But is gonna take us a long time to heal damage caused this crisis were making a lot of progress we're a much stronger position today there's gonna take more time.
Secretary got and we wanna thank you so much for coming in today will be watching to see what all of you come up -- this week.
Good to be here because -- --
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