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Geithner: Congress will raise debt limit

Congressional Republicans have assured President Barack Obama that they would not hold the economy hostage over raising the debt ceiling, Treasury Secretary Timothy Geithner said yesterday.

Congressional Republicans have assured President Barack Obama that they would not hold the economy hostage over raising the debt ceiling, Treasury Secretary Timothy Geithner said yesterday.

But Republicans appearing on television news shows insisted they would not support an increase of the $14.3 trillion borrowing limit without an accompanying deal to rein in future deficits.

“I want to make it perfectly clear that Congress will raise the debt ceiling,” Geithner told ABC’s “This Week with Christiane Amanpour.”

“They recognize it and they told the president that on Wednesday in the White House and I sat there with them and they said, ‘We recognize we have to do this and we’re not going to play around with it, because we know the risk would catastrophic.’”

After Congress approved a deal last week to fund the government through September, U.S. lawmakers are now focusing on the looming debt limit battle and a July 8 final deadline that could halt Treasury borrowing. As of Thursday, the Treasury was just $76 billion below the limit.

The Treasury estimates that the federal government will reach the borrowing limit by May 16, prompting the Treasury to take some extraordinary cash-flow measures, such as dipping into government pension funds, which could delay the day of reckoning for up to eight more weeks.

 
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