By Walter Alarkon - 03/16/10 05:45 PM EDT
Despite warnings from independent bond raters over the country’s unsustainable fiscal situation, Geithner told a House panel on Tuesday the bond rating is safe.
“There's not a chance that's going to happen to our country,” Geithner said in response to a question from Rep. Hal Rogers (R-Ky.).
A report by the bond rating agency Moody’s on Monday warned that the U.S. and several other countries with debt issues risked “downward pressure” on their AAA rating.
Geithner pointed to the president's bipartisan fiscal
commission as a sign that the administration is dedicated to dealing with the
long-term debt problem.
“Future growth will be weaker, this recovery will be weaker, if we don't do a better job together over time of demonstrating that we have the political will to make some tough choices,” Geithner said.
Rogers said current deficit projections are the problem.
“Your budget proposes a record $1.6 trillion in deficit spending,” Rogers said. “I don't think Moody's is going to like it.”
Deficits are expected to average nearly $1 trillion over the next decade and won't approach levels equivalent to 3 percent of the country’s gross domestic product, the maximum level considered sustainable by economists, according to the independent Congressional Budget Office.
Geithner called on Congress to join administration efforts to deal with the deficit.
“We still face long-term unsustainable growth in the commitments of our government,” he said. “That's why we need healthcare reform and other sets of changes.”
Geithner agreed with suggestions that the fiscal picture is unsustainable, but he said it's possible to find bipartisan support to fix that.
“It is very important for people on both sides of the aisle to say what you're saying today,” Geithner told Rogers, “which is deficits matter, tax cuts aren't free, we have to pay for the things we do as a government and we have to recognize that our long term requires we restore balance to our fiscal position.”