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Geithner confident of higher debt limit; Says GOP assures action on default

Treasury Secretary Timothy F. Geithner says Republican leaders have privately assured the Obama administration that Congress will raise the government's borrowing limit in time to prevent an unprecedented default on the nation's debt.

But a top Republican quickly pushed back Sunday and said there was no guarantee the GOP would agree to increase the $14.3 trillion debt ceiling without further controls on federal spending.

Geithner told ABC's "This Week" and NBC's "Meet the Press" that Republicans told President Obama in a White House meeting Wednesday that they will go along with a higher limit.

"I want to make it perfectly clear that Congress will raise the debt ceiling," Geithner said in the interviews taped Saturday and aired Sunday.

He said the leaders told Obama that they couldn't play around with the government's credit rating. "They recognize it, and they told the president that on Wednesday in the White House," Geithner said.

But Rep. Paul D. Ryan Jr., R-Wis., chairman of the House Budget Committee, said that while it was true that nobody wants the country to default, it's essential to address future borrowing at the same time.

"We want cuts in spending accompanying a raising of the debt ceiling. And that is what we have been telling the White House," Ryan said on CBS' "Face the Nation."

Ryan wrote the 2012 budget blueprint that the House passed Friday. The plan for the budget year that begins Oct. 1 would cut $6.2 trillion over the coming decade and transform Medicare for people under 55.

The government is projected to reach its borrowing limit no later than May 16, and risks going into an unprecedented default. Geithner has said he will have a few options that would delay a possible government default until about July 8.

The looming credit crunch has heightened the tensions between the administration and Republicans in Congress.

A last-minute deal April 8 between the White House and the GOP avoided a government shutdown on a budget running through September. But Republicans are seeking additional savings in the budget for the next fiscal year, and say that unless they get them, they won't support raising the debt ceiling.

In an interview Friday, Obama predicted that Congress would raise the debt ceiling but acknowledged that he would have to offer more spending cuts in the budget to get a deal. Later, Obama's spokesman said a vote on the debt ceiling could not be contingent on upcoming negotiations over the budget.

If the debt ceiling is not raised, Obama said, it would undermine the solvency of the government, roil financial markets and potentially "plunge the world economy back into a recession."

Former Federal Reserve Chairman Alan Greenspan said the country's financial crisis is "so imminent and so difficult that I think we have to allow the so-called 'Bush tax cuts' all to expire."

The House budget blueprint would extend those tax cuts at all income levels.

"I think that what we have to become aware of is that if we allow taxes to fill in the holes here, we are going to find that we are getting ever closer to the type of economies that exist in Europe, which are very heavily laden and not rapidly growing the ways ours can," Greenspan said on NBC.

Assessing the current economic state, he said there are "a lot of head winds that are hitting the economy now and slowing it down, and we are in a soft patch."

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