Geithner: 'No Risk' U.S. Will Lose Top Credit Rating
The New York Times reports:
The Treasury secretary, Timothy F. Geithner, said Tuesday that there was “no risk” that the United States would lose its AAA credit rating and that investors were still confident in government bonds, strongly disagreeing with the negative assessment of the nation’s outlook by the Standard & Poor’s ratings agency.
Mr. Geithner made his remarks during appearances on morning television programs a day after the S.&P. revised its outlook on the country’s Triple AAA rating — the highest level — to negative from stable. The decision was freighted with political implications because it cited the need for Republicans and Democrats to take action on a program that reduces the deficit.
In his comments, Mr. Geithner tried to reassure investors that the Democrats and Republicans would reach a deal on reducing the deficit, a concern that was at the heart of the S.&P.’s reasoning for lowering its outlook.
Asked in an interview on Fox Business Network whether there was a risk that the United States could lose its AAA rating, Mr. Geithner said: “No risk of that.”
“No risk,” Mr. Geithner said, according to a transcript of his remarks. “Again, if you look — if you listen carefully now, you see the leadership of the United States of America, the president, the Republican leadership in both houses and the Democrats recognizing now that this is the right thing to do for the economy. That we have to put in place now reforms that bring down our long-term deficits in ways that’ll help strengthen future growth. And that’s incredibly important recognition by people and we’d like to put something in place as soon as we can so we can begin that process.”
Both President Obama and Republican lawmakers have suggested plans to cut the federal deficit by at least $4 trillion over the next 10 to 12 years, but disagree on methods. In its warning, the S.&P. questioned whether government leaders would be able to agree on how to address the medium- and long-term budget challenges by 2013.
“More than two years after the beginning of the recent crisis, U.S. policy makers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,” said Nikola G. Swann, a credit analyst at Standard & Poor’s. The firm said that there was a one in three chance that it could lower its long-term rating on the United States in two years.
As Mr. Geithner took the lead for the administration in responding to the S.&P. warning, President Obama began a tour to promote his plan for reducing the deficit. In his first stop, at a town hall meeting in Virginia, Mr. Obama said he believed Democrats and Republicans will come together and reach a deal to cut budget deficits.
