Geithner says confident debt limit will be raised

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U.S. Secretary of Treasury Timothy Geithner addresses an Access to Capital Conference entitled ''Fostering Growth and Innovation for Small Companies'' in the Cash Room at the Treasury Department in Washington, March 22, 2011. REUTERS/Larry Downing

WASHINGTON | Sun Apr 17, 2011 9:04am EDT

(Reuters) - Treasury Secretary Timothy Geithner said on Sunday he was confident Congress would raise the nation's debt limit and that it may need to do so before a deal is reached to rein in future budget deficits.

"Congress is going to have to raise the debt limit," he said in an interview on NBC's "Meet the Press."

"The responsible people (on Capitol Hill) understand that," he said. "And I'm very confident they'll do this."

Geithner has warned lawmakers that the legally set $14.3 trillion debt limit will be reached by May 16, although Treasury could push back the day of reckoning until about July 8 by taking extraordinary action.

If the ceiling on the nation's borrowing is not lifted, the government would eventually default on its debts. Geithner said on Sunday lawmakers know they must avoid the damage to national credibility that a default would cause.

Republicans have sought to use the need to raise the debt limit as a lever to push for big spending cuts.

The Republican-led House of Representatives on Friday approved a plan to slash spending by nearly $6 trillion over a decade and cut benefits for the elderly and poor. President Barack Obama has offered a competing vision to curb deficits by $4 trillion over 12 years.

Geithner said it may not be possible to cut a deal by the time the debt limit needs to be raised.

"I think you can do these things in parallel," he said. "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."

Geithner claimed that, politics aside, there is less difference than many claim between the deficit-cutting objectives of the Obama administration and Republicans.

"What we would like Congress to do is, before we get too far into June ... agree on concrete targets, deadlines, timelines and an enforcement mechanism that will force Congress to live within its means over the next three to five years," he said.

Geithner said an overhaul of the U.S. corporate tax system, which would lower rates, was "doable" this year because it should be possible to attract bipartisan support if it was structured as a way to attract investment.

He turned aside a question whether he expected to serve a second term at the helm of Treasury if President Obama is re-elected in 2012. "I've got a lot on my plate. I enjoy these challenges, I believe in them," Geithner replied.

(Reporting by Glenn Somerville; Editing by Tim Ahmann)