July 18, 2011
Treasury Secretary Tim Geithner told CNBC Monday that he is certain that congressional leaders will strike a deal to raise the federal debt ceiling prior to the Aug. 2 deadline to avoid default.
“Each side has said definitively that default is not an option,” he said, “They’re not going to play around with this.”
“If the United States of America were to default it would be catastrophic for the American economy, for the American financial system, for the average American people, it would be a substantial unfair tax on all Americans and it would bring the world economy … to the edge of recession again,” he said. “There’s no alternative for Congress raising the debt limit and that’s why you’re seeing Republicans as well recognize that reality and take default off the table.”
He added that while it’s encouraging that congressional leaders are moving toward a debt agreement before the deadline, “of course it’s not enough.”