mr. geithner say, hey, i won't pay that. >> and mr., the business government cable says that the biggest threat comes from the right-wing nutters in the american congress. is he right? [ laughter ] >> you know, i haven't heard that one. i have to laugh when i hear a left-wing -- >> he is right, isn't he? >> lunatic in the british government say that. hey, i will put the american economy even as bad as it is now up against the british economy and the american way of life up against the british way of the life any day of the week. >> judson phillips, and just for your information, vince cable is actually a centrist and a member of the liberal democrats, but thank you very much for joining us. we will be right back. i love that my daughter's part fish. but when she got asthma, all i could do was worry ! specialists, lots of doctors, lots of advice... and my hands were full. i couldn't sort through it all. with unitedhealthcare, it's different. we have access to great specialists, and our pediatrician gets all the information. everyone wor

mr. geithner was more important in the bush administration than the president's appointee. he served under ben bernanke, he worked with secretary paulson. if there is criticism, it goes to all of them. i think it is important that it be independent, that it not be a second thought from the bank regulators, whether one banking regulator or individuals, and i believe that will make a great deal of sense to give the consumer -- the gentleman said let's give them equal status tree you give them an equal entity, subject to others. the bill itself had a common theme. one criticism was that the bill was to create. we probably exceeded the attention span of some members of the congress, but i guess they can wait for the movie. we are dealing with an interconnected system, and we dealt peace mail, and there was a central theme and it was that by sources of liquidity outside the banking system and by increased information technology, people in the industry have figured out a way to engage in lending while appearing to escape the burden of risk. they appeared to be able to afford risk

mr. geithner's bluff that they would stop making the interest payments. >> reporter: he believes congresscome up with a deal to raise the debt limit and prominent san francisco investment bankers jack berkquist thinks they will, too. but clients that are about to retire are starting to worry. >> we did have a long-term client leave us a couple of weeks ago because she could not understand how this would play out in her five. >>> she liquidated her stock account and put all of the money in real estate. >> what is that going to cost her? >> about $100,000 in taxes. >> the head of willow creek financial says he is trying to calm his clients but the internet and 24 hour news cycle doesn't h help people are emotional and letting emotions run their investment decisions more than ever. >> reporter: in washington, d.c. white house spokesman jay carney is also trying to calm the waters. >> contrary to what you hear in the public sphere there is momentum towards achieving significant deficit reduction. >> reporter: but momentum for a deal to raise the debt limit isn't evident from what congressiona

mr. geithner would have the cash flow to make those interest payments and in my opinion that would be theo make sure that our full faith and credit of the united states is not put in danger. >> steve, if i can compare this. if i don't pay for my insurance but pay for my car payment, i haven't paid for my insurance so technically i defaulted on a payment. would the government not be doing that despite the fact it may not be on interest payments they are defaulting on other obligations. >> it depends. for example, there's a big difference between a treasury payment -- per a payment for a treasury bond versus a legal payment. if we go past august 2nd and the federal government is prohibited from borrowing it simple lie can spend the money that comes in every day through tax payments. that's a bit of a problem. we spend $1.40 for every dollar we take in tax revenue. the debt gets paid. social security gets paid. the troops get paid. >> there's trust and confidence. the world markets to see the largest economy in the world trying to make these sorts of decisions not paying x but paying y. isn'

mr. geithner, whose credibilility is zero with republicans and this is one reason why, says no, no, 4:00 this afternoon, the asian markets open, and that's the drop dead date. the president this week in his tantrum compress conference said republicans won't say any to anything. they said yes to the ryan budget, the democratic senate said no. they said yes to cap and balance. the only plan put on paper, the president has put not one on paper, the only one debated in the house, the only one to pass a house of congress, had five democratic votes behind it, the democrats on friday wouldn't even vote on it. they tabled it so their fingerprints wouldn't be on it. who is having trouble saying yes? >> last week, you said the republicans were having trouble saying yes and should take the best deal on the table. do you think tt's not the case anymore? >> no, first of all, they've sent something over and the democrats have said no. sooner or later we're going to get -- i still think to the mcconnell plan which is not plan "b," but it's plan "z" but we will get there sooner or later. >> alice, are y

mr. timothy geithner himself.sted in. >> one of the things we came away from yesterday was that friday the speaker of the house, john boehner, had walked away and said i will not negotiate with the white house anymore, and that's up to capitol hill, right? and i asked timothy geithner about this. >> over the course of yesterday, the president was in touch with the leaders and they were talking throughout the day -- >> an early-morning meeting. >> so the president is still actively involved in these negotiations? >> absolutely. >> with the speaker? >> yes. >> so there you go. the negotiations with the white house, according to the white house and treasury secretary guide inner, those negotiations are still going on. and also in the interview, which we taped about 20 or 15 minutes ago, that in fact he didn't rule out a big debt deal yet, so i would say the whole thing is still in flux. >> we keep talking about a deadline of august 2nd, but there's another deadline floating around that expires in a few hours. you nee

mr. speaker. as secretary geithner has observed, failure to raise the debt ceiling would have catastrophic economic consequences that would last for decades. mr. quigley: this was assured by former treasury secretary paulson who said that inaction is simply not an option. i agree. and believe that raising the debt ceiling must be accompanied by deficit reduction. also by cutting spending, but also by elimb hit thatting some unnecessary -- eliminating some unnecessary tax breaks. there are those who say there are no unnecessary tax breaks. let me just give you one. if your neighbor guys -- buys a car and pays interest on the loan to buy that car, that interest is not tax deductible. if your other neighbor buys aat and pays interest -- buys a yacht and pay interests to buy that, that interest is tax deductible. when we're borrowing 40 cents for every dollar, we have to ask ourselves if those tax breaks are really worth it. if we're starting from scratch, would we really give yacht owners an extra tax break? thank you and i yield back. the speaker pro tempore: the gentleman's time has expired. for wha

mr. geithner to leave. i was glad to see him go back and do what he does well, he's a good professor. i would like to see the other gentlemen go and do whatever he does well. so, we're at a crisis and we have got to get to building things with american hands and until we can do that with all this possibility, we're going to continue to go the wrong way. so i will just say this, i think it's okay, even though amnesia set in how we got where we are in this deficit situation, but we've got it. we've got to deal with it. it's okay to have a debate in front of the american people, they will get it. we have the capacity to do other things, economic development, infrastructure, all these things we're talking about. why aren't we doing that? it's frustrating because the country needs it, the country is in great need and there is some things we know we have to do, go to any state, any city and you'll find out we're falling way behind as we think about our asia neighbors, european neighbors and we think we're going to compete? we've got to get to doing things. thank you, i'm sorry for -- >> no,

mr. geithner was more important in the bush administration than the president's appointee. he served under ben bernanke, he worked with secretary paulson. if there is criticism, it goes to all of them. i think it is important that it be independent, that it not be a second thought from the bank regulators, whether one banking regulator or individuals, and i believe that will make a great deal of sense to give the consumer -- the gentleman said let's give them equal status tree you give them an equal entity, subject to others. the bill itself had a common theme. one criticism was that the bill was to create. we probably exceeded the attention span of some members of the congress, but i guess they can wait for the movie. we are dealing with an interconnected system, and we dealt peace mail, and there was a central theme and it was that by sources of liquidity outside the banking system and by increased information technology, people in the industry have figured out a way to engage in lending while appearing to escape the burden of risk. they appeared to be able to afford risk

mr. geithner to leave. i'm glad to see them go back and do what he does well. he's a good professor.i would like to see the other gentleman go do what he does well. we are in a crisis. we have got to get to building things with american hands, and until we can do that and all this possibility, we're going to continue to go the wrong way. i will just say this, i think it's okay, even though amnesia has set in of how we got where we are in this deficit situation. but we've got to do with it. it's okay to have a debate on it. in front of all the american people. they will get a. but we have the capacity to do other things, economic development, infrastructure, all these things, why are we doing that. it's very, very frustrating. the country needs a. the country is in great need and there's some things there that we know we have to do. go to any stake him in the city and you will find out that we are falling way behind, and think about our asian neighbors are our european neighbors, and we think we will compete. we've got to get to doing things. thank you. i'm sorry for -- >> no, thank y

mr. geithner has insisted that it says what it actually says is that the secretary of the treasury lacks the authority. the secular branch as a whole lacks authority to disregard outstanding financial obligations. such that a default would be unconstitutional. a default in the sense that if the debt limit increase is not passed by congress, he would lack the authority to withhold funds to make sure that the united states government remains current on its debt service obligation and paying its debt interest that we bring in between 175 and $20 billion a month roughly, the debt service payments are a small fraction of that, less than 10% of that. that would mean that under section 4 of the 14th amendment, the treasury secretary is to make sure that those get paid first. he lacks the discretion under section 42 withhold those funds and send them elsewhere because he has to honor the debt obligations of united states. by the very important point on the language of section 4 says that as approved by law or words to that effect. are codas congress that makes the law, and its articles section c

mr. geithner been doing since january? i think what we're hearing now, and a better answer to that is, with these private discussions now taking place between him and banking leaders is, he is working on this and has the ability to prioritize the interest payments, and i would imagine, social security payments as well. so i think it is a bit of a red herring for the administration to say they cannot do this. >> make no mistake, if there is a crisis on august 2, if there is a decline in the stock market, if there is a hysterical reaction, the responsibility lies squarely on the shoulders of the president. at any point in the last six months, he could take the fall off the table. he could look at the numbers and reassure the markets he will pay the interest on the debt. he should reassure senior citizens he will pay their debt. he should reassure soldiers. if something happens august 2, the blame and responsibility lies squarely on his shoulders. i call on the president today to support this legislation to publicly come forw

mr. geithner was more important in the bush administration than the president's appointee. he served under ben bernanke, he worked with secretary paulson. if there is criticism, it goes to all of them. i think it is important that it be independent, that it not be a second thought from the bank regulators, whether one banking regulator or individuals, and i believe that will make a great deal of sense to give the consumer -- the gentleman said let's give them equal status tree you give them an equal entity, subject to others. the bill itself had a common theme. one criticism was that the bill was to create. we probably exceeded the attention span of some members of the congress, but i guess they can wait for the movie. we are dealing with an interconnected system, and we dealt peace mail, and there was a central theme and it was that by sources of liquidity outside the banking system and by increased information technology, people in the industry have figured out a way to engage in lending while appearing to escape the burden of risk. they appeared to be able to afford risk

mr. geithner, but we've seen no plan from this administration or the democrats in the house. let me repeat. we have seen no plan from the administration or the democrats in this house. we all know it's easier to criticize than to offer a plan of your own. now, before this plan to cut our spending and balance our budget is demagogued, let me tell you exactly how this thing works. this plan makes no changes to social security and medicare. this plan makes no changes to the veterans' spending. this plan will cut spending by $111 billion in fiscal year 2012. we must use this debate as an opportunity to bring real change to washington and start bage down our debt. if you -- start paying down our debt. if you believe starting a way forward for a balanced budget are commonsense ideas, vote for this legislation. with that i yield back the balance of my time. the speaker pro tempore: the gentleman yields back his time. the chair recognizes the gentleman from nevada, mr. heck, for five minutes. mr. heck: mr. speaker, i'm here to share a short letter i received from one of my constituen

joining me now live this morning for the very latest, the secretary of the treasury, tim geithner. mr. secretary, welcome back. >> nice to see you, david. >> what happened? >> well, this is hard. you know, it's politically very hard, but this is a grave moment for the country. we need to do something very big, very substantial to bring our long-term deficits down over time. we have to do that in a way that's good for the economy for more support because the economy is healing from the recession. it's going to require both sides to compromise. president's bringing leaders together again at the white house this evening to try to figure out how to move forward. >> what's he actually saying? because you're hearing boehner saying they're demanding tax increases, we're not going to do that. they've also said you were pedalling a bid on whether to cut entitlement programs like medicare or social security. what's the fact? >> that latter thing is not true. the president is standing tough. he is willing to do very, very difficult things. >> like what? on medicare? >> like getting substantial s

mr. geithner was more important in the bush administration than the president's appointee. he served under ben bernanke, he worked with secretary paulson. if there is criticism, it goes to all of them. i think it is important that it be independent, that it not be a second thought from the bank regulators, whether one banking regulator or individuals, and i believe that will make a great deal of sense to give the consumer -- the gentleman said let's give them equal status tree you give them an equal entity, subject to others. the bill itself had a common theme. one criticism was that the bill was to create. we probably exceeded the attention span of some members of the congress, but i guess they can wait for the movie. we are dealing with an interconnected system, and we dealt peace mail, and there was a central theme and it was that by sources of liquidity outside the banking system and by increased information technology, people in the industry have figured out a way to engage in lending while appearing to escape the burden of risk. they appeared to be able to afford risk

mr. reid: secretary geithner said it's already started. the international community is extremely worried. they can only again overnight loans. and it's really precarious for our country. mr. president? the presiding officer: the majority leader. mr. reid: i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call: mr. mcconnell: mr. president, i suggest the -- i ask consent that the quorum call be dispensed with. the presiding officer: without objection. mr. mcconnell: mr. president, not surprisingly, i have a little take on what's been happening in the last few days, and my good friend the majority leader and his colleagues. let me just explain what's been going on in congress this week. the american people have been waiting on us to do something to prevent default. they want us to end this crisis right now. and over in the house of representatives, you've got the speaker of the house doing his job. speaker boehner has been doing the hard work of governing, working day and night to put together a

mr. president, according to president obama and treasury secretary geithner, the federal government will befall on its obligations in five days, on august 2, 2011. it is clear that some democrats, including president obama, want to use this fiscal crisis to raise taxes under the guise of closing loopholes. the administration wants to set the stage for tax increases to finance historic levels of government spending. when this president came into office, he saw himself as the second coming of franklin d. roosevelt. he was going to finish the work that l.b.j. was unable to complete and a fawning media was happy to encourage his grandiose vision for national economic reordering. now, i get a big kick out of this "time" magazine, "the new new deal." using the financial crisis of 2008 and 2009, he was going to transform the united states into a european-style social democracy. businesses and the individuals who start them would no longer be free entities with property rights. they would be arms of the state that exist for the purpose of funding ever-expanding welfare programs. taxation would n

mr. obama says he's been discussing plans with treasury secretary geithner who met friday with the federal reserve chairman ben bernanke. standard and poors has warned not reaching a large-scale deal could lead to unprecedented downgrade of the nation's triple-a rating, a move that could send interest rates soaring. nashville, tennessee, on the independent line, andrew. >> caller: hi, there, good morning. first of all, i'm calling on behalf of oneledger.org. yesterday senator tom coburn of oklahoma made very good points about he was speaking directly about this debt ceiling issue, but spoke about term limits. i hope you could find that cliff, he said it so much better than i can try to say it in this short amount of time. i really think that would solve a lot of the issues down the road. not overnight, but no-brainer place to start. >> even the issue at hand? caller? do you think it would solve the issue at hand? >> caller: it's an underlying issue, it will not solve the issue overnight, no. >> what should we do about the issue at hand then? caller? we'll leave it there. dublin, georgia, r

secretary geithner also said we're running out of time to avoid this iceberg, this huge iceberg, mr. president, is in the ocean and our ship of state is headed toward it. the rating agencies have already placed our triple-a credit rating under review and could downgrade it at any time. this is what secretary geithner said. again, i quote -- "the eyes of the country are on us, the eyes of the world are on us and we need to make sure we stand together and send a beginsive de signal that we're going to take the necessary steps to avoid default." so, mr. president, i ask what it will take my republican colleagues to wake up to the fact that they're playing a game of political chick wen the entire global economy -- chicken with the entire global economy. they must wake up soon, mr. president. mr. mcconnell: mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: let me echo the initial remarks of the majority leader with regard to the decision which in this particular instance would agree was a mutual decision that we need to stay in every day until we re

mr. date, we rode secretary geithner to express our concern about elizabeth warren's -- we wrote to secretary geithner to express our concern about elizabeth warren's con involvement. we received documents that said elizabeth warren took a leadership role. and e-mail showed that the cfpb convened an emergency meeting to push settlements solutions that focused on principle reductions and modifications. would you agree that that activity constitutes a little bit more than advice? >> thank you for the question. with respect to the request as of the treasury department with respect to an elizabeth warren's participation in the mortgage servicing sediment conversation, i feel that the response has been on ambiguous over time. i would reiterate it today. we had been asked by the secretary of the treasury to provide advice to the federal and state agencies involved in this matter. we try to do that. in doing so, we wear active and and engaged -- we were active and engaged participate -- we were an active and engaged participants. >> we can look at a series of e- mails between ms. warwick and yoursel

mr. daily said and also listened to what secretary geithner said this morning.nk there is a opening here. what they're concerned about is that there would not be a process to get to the longer term issue. i think that is something that the house and senate leaders have laid out clearly with this idea of a joint select committee. required to report six months second stage. i'm hopeful that something could happen. i don't think it's sustainable that instability to talk about something short-term. because of the election. in other words, i don't think people are going to be particularly understanding if the president blocks. since the election. right thing for the country. many sustainable. something i hope credible cuts. that are meaningful cuts. and in a process to have even more cuts before the comes up. by the way in the last 40 years. 38 times short-term so short-term is the rule the exception would be something longer term. >> in addition to serving the senate. you have a unique background and did you held other positions in washington that give us a differen

mr. sharma, in the last six or seven months, have you had a conversation with secretary geithner about the ratings of the u.s. sovereign debt? >> chairman, like we do for all entities that issue debt, we meet with the management, in this case, the treasury is management for us. so our sovereign team has had ongoing dialogue. we do this not only with sovereign governments around the world, we do that with companies. we meet them regularly, and sometimes quarterly and have new update information or to our sovereignty has been meeting and discussing and dialoguing with the treasury and other parts of the administration, and some members of the congress, to just better understand what the situation is, what the policies are being popular, how credible with those plans be. so they have been having a regular ongoing dialogue. >> so let me restate my question. had you and secretary geithner had a conversation about the rating of u.s. sovereign debt? >> no, chairman. i have not had any direct conversation. >> what about, you know, i know this often debt thing is not just a u.s. issue right now but

geithner, treasury secretary. we have heard from senate minority leader mitch mcconnell, essentially saying hey, mr.resident, members of congress, let's talk. extending an invitation to negotiate. we will be hearing from the president, 4:40 p.m. eastern time. we'll take it live here on cnn. . build a new app for the sales team in beijing. and convince the c.e.o. his email will find him... wherever he is. i need to see my family while they're still awake. [ male announcer ] with global services from dell, jim can address his company's i.t. needs through custom built applications, cloud solutions and ongoing support in over 100 countries. so his company sees results. and jim sees his family. dell. the power to do more. it's schwab at your fingertips wherever, whenever you want. one log in lets you monitor all of your balances and transfer between accounts, so your money can move as fast as you do. check out your portfolio, track the market with live updates. and execute trades anywhere and anytime the inspiration hits you. even deposit checks right from your phone. just take a picture, hit deposit and

mr. obama and secretary of state tim geithner have acknowledged this in the past. the president as recently in this year's state of the union address. as for the debt limit politics, this is also a winner. democrats and republicans say they have agreed privately on sizable spending cuts over a ten-year budget window. no doubt, some of those cuts are less real than others, and future congresses could rewrite any enforcement provisions passed this year. but republicans still have an incentive to set spending on a downward path, and mr. obama has an incentive to show he is no longer a hostage of nancy pelosi as he runs for re-election. the political sticking point is mr. obama's desire for some republican buy-in on raising revenues. his political left is still sore that he agreed to extend the bush tax rates through 2012. thus he's pounding republicans to agree to eliminate certain business tax deductions that political advisors david axelrod and david fluff have told him would be hard for republicans to defend, private jets, deductions for oil and gas, and those whic

mr. chairman, i want to follow-up. in a letter to the subcommittee dated june 13, secretary geithner acknowledged that he, along with the deputy secretary, the omb director, and representative of the president's office met with personnel on april 13, an actual meeting. are you aware of what was discussed at that meeting? >> congressman, no, i am not. i know that they regularly meet with them as part of the process of trying to get a better understanding, and they met with the treasury. i was not even aware that they met with the members that you just said, but i know they had a meeting. they met with them. because i am not privy -- i do not have privy to the people they meet in the ratings process. >> according to documents obtained by this committee, two days after that meeting, on april 15, a man reached out to the secretary to let them know the committee outcome. do you know what was discussed on that call? >> no, congressman, i do not. normally, the process would be, once the ratings committee makes a decision, wheelwright up the decision. we also inform the issuer of the trading action -- rating action if there was

of te secretary geithner also said we are running out of time to avoid thisd t iceberg. this huge iceberg mr. president is in the ocean and are shipped is headed toward t it. the rating agencies have already placed our aaa credit rating under review and in a and it could downgrade it at anyw timeh this is what secretary geithner said and again i quote. the o eyes of the country -- tha eyes of the world around us and we need to be sure we stand together and send a signal that we are going to take theoing to necessary steps to avoid default. mr. president i ask what will il take when our republican colleagues to wake up to the t fact that they're playing a game of political chicken with the entire they must wake up soon mr. president.ognized. >> mr. president? >> the republican leader is . recognized. >> let me go to the initial remarks of the majority leaderiy with regard to the decision which in this particular instance i think we would agree is mutual decision and we need to stay in every day until we resolve this crisis confrontingc our country.ty so i concur with what the majority leader

we hear secretary geithner's warnings, hearing them all morning long since before january. we know we hit the ceiling in may. what is it, mrat makes this time so difficult, so different? >> what's different is people in the country are upset, appropriately so, unsustainable fiscal position. our budget deficits at record levels. there's not a lot of faith congress will do anything about it. that explains 2010 elections and explains all the energy going into doing something now in connection with the debt increase that will return us to a sustainable fiscal path. >> we heard from the president week before last in an interview and talked about it since, the social security checks. something like 70 million supposed to go out to resit yents day before the deadline august 3rd. if washington doesn't come up with something, sir, won't the treasury still find a way to pay these men and women? >> first of all, there won't be a bond default. they will find a way to pay the debt as a matter of first priority. after that there's a possibility that the social security payment due august 3rd would be delayed, a much greater possibility

i was in a hearing not long ago with timothy geithner and he was discussing punishing big oil and getting more tax on it and i was able to say to him, mr. secretary, are you aware that the majority of energy companies in the united states are independent producers and they're small companies? 95% of the drilling that happens in the oil and gas production that happens in the united states is done by independent producers. these 18,000 small companies that are out there, they account for 67% of the total energy production in the united states. these small companies which on average have 12 people on staff, 12 employees. these are not big giant companies and throwing around terms like big oil makes me smile when i'm thinking about what's happening in oklahoma with lots and lots of service companies and producers and drillers that are really doing great jobs. i was talking to one of those companies recently, guess who they're targeting to be able to hire? their favorite people to be able to hire are returning vets because of their work ethic, because of their skills that they're bringing back, they are companies specifically going after re

secretary geithner also said we're rning out of time to avoid this iceberg, this huge iceberg, mr. president, is in the ocean and our ship of ste is headed toward it. the ting agencies have already placed our triple-a credit rating under review and could downgrade it at any time. this is what secretary geithner said. again, i quote -- "the eyes of the country are on us, the eyes of the world are on us and we need to make sure we stand together and send a beginsive de signal that we're going to take the necessary steps to avoid default." so, mr. president, i ask what it will take my republican colleagues to wake up to the fact that they're playing a game of political chick wen the entire global economy -- chicken with the entire global enomy. they must wake up soon, mr. president. mr. mcconnell: mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: let me echo the initial remarks of the majority leader with regard to the decision which in this particular instance would agree was a mutual decision that we need to stay in every day until we resolve

secretary geithner also sai we're running out of time to avoid this iceberg, this huge iceberg, mr. president, is in the ocean and our ship of state is headed toward it. the rating agencies have already placed our triple-a credit rating under revie and could downgrade it at any time. this is what secretary geithner said. again, i quote -- "the eyes of the country are on us, the eyes of the world are ons and we need to me sure we stand together and send a beginsive de signal that we're going to take the necessary steps to avoid default." so, mr. president, i ask what it will take my republican colleagues to wake up to the fact that they're playing a game of political chick wen the entire global economy -- chicken with the entire global economy. they must wake up soon, mr. president. mr. mcconnell: mr. president? the presiding officer: the republican leader is recognized. mr. mcconnell: let m echo the initial remarks of the majority leader with regard to the decision which in this particular instance would agree was a mutual decision that we need to stay in every day until we resolve

mr. sharma, in the last six or seven months, have you had conversations with secretary geithner about the ratings of u.s. sovereign debt? >> chairman, like we do for all entities that issue gets -- debt, we meet with the management. treasury is the management for us. we have had ongoing dialogue. we do this with sovereign governments around the world, we do it with companies. we meet them regularly. sometimes we meet when they have updated information. we have been meeting and discussing and having a dialogue with the treasury and other parts of the administration and some members of congress to better understand what the situation is and the policies that have been formulated. they have been having a regular ongoing dialogue. >> let me restate my question. have you and secretary geithner had a conversation about the rating of u.s. sovereign debt? >> no, chairman. i have not had a conversation. >> this sovereign debt is not just a u.s. issue. it is a global issue, particularly in the u.s. -- the european union and the european central bank. have those entities been having ongoing dialogue

mr. president. i take this time to point out the obvious, and that is we're 13 days away from august the 2nd, the date that secretary geithner that is indicated that if we do not raise the debt ceiling, america rungs the risk of defaulting on its debt and not paying our bills. i bring this up because this is an issue that we never should be this close to this deadline. it's been pointed out many times that the debt ceiles has very little -- creeling has very little to do with how much money we spend because we've already spent this money. the question is whether we're is going to pay our bills, whether the united states is going to live up to our obligations or whether we're going to default on our debt? the prospect of not making that deadline is basic lynn thinkable, that the -- is basically unthinkable, that the united states would give up its preeminent position internationally. it would have an effect on everyone in this nation. we already have heard from the rating houses. last week both standard & poor's and moody's investor services warned that they are considering downgrading the country's credit rating if the debt

mr. secretary. we will now join our discussion session. >> thank you very much. it is a pleasure and an honor. perhaps the first question to secretary geithner, i know that you and the obama administration or admire in india's growth rate. >> and fiscal deficit. [laughter] >> but there is some time of feeling in the advanced countries in europe and the u.s. that this growth rate somehow subtracts from progress in other countries. how do you explain, how do you elaborate on the interdependence of economies on how, in fact, wrote in the emerging market economies, particularly in india, in some circumstances is actually quite beneficial to the u.s. economy and u.s. consumers and investors? it is sometimes a hard thing to really explain and get the message out. maybe you can take this opportunity to say a few words on that. >> it seems self-evident to us, but it is not necessarily accepted immediately by anybody. the way i think about it is this. if you look at the american economy today, the most rapidly growing and strongest parts of the american economy are those most able to benefit from the rapid growth we are seeing in india and other part

treasury secretary geithner have told us that our credit rating, were we to default, would take years to rebuild and that our country would never be the same if we were to default on our debt. mr. president, you know this. you're a businessman. we can't ask for a do-over, a mulligan, if we default on our debt. we can't say oh, we were just kidding. this is truly the real deal. i want to share some of the ways we would be directly affected by a government default. paychecks for soldiers, in afghanistan and iraq and at bases around the world conceivably wouldn't go out. f.a.a. towers could shut down. border crossings could close. operations at the f.b.i. and the c.i.a. would be put at risk. safety inspections of the food that we eat and the cargo that enters our ports could halt. and the resulting spike in interest rates would ironically make our debt even harder to tackle because each 1% rise in interest rates alone would result in $130 billion in increased interest payments on our national debt each year. perhaps, most importantly, hard-working american families would also feel the crunch. a spike in interest rates would effectively force a tax on all americans and american bu

mr. president, last night, we heard from president obama in a prime time address from the east room of the white house. the topic was raising the federal debt limit. according to the treasury secretary geithner, the federal government may breach the statutory debt limit as early as august 2, 2011. that's one week from today. remarkably, the president in yet another prime time address against hectored the american people about the need for politically charged tax hikes as a cure-all for our deficit and debt problems. you have to hand it to the president. he is a true believer. for the president, there seems to be no problem in washington that can't be fixed with tax increases. even his own party has moved beyond him on this. to be certain, democrats have not become the party of tax relief. for example, the plan offered by the majority leader does not address the ten-year tax increase of $3.5 trillion that is set to kick in on january 1, 2013, but last night on cnn, one reporter got it about right. this is how she put it. quote -- "nobody is talking about tax increases other than barack obama." unquote. the president was on his own last night. it was a speech very much divorced from the realit

geithner here and ben bernanke. we could never quite get anyone to actually define exactly what we're talking about in this situation. but i appreciate your answer. gentleman's recognized. >> thank you, mr chairman. one striking he is son from the -- lesson from the financial crisis is that there were enormous aspects of the financial system that no one knew anything about. americans in general didn't know anything about it and, really, no one in congress knew anything about it. i don't think including members of this committee, including me. and i don't think it was because we lacked diligence -- well, not in every case. it was because there was nothing to call our attention to some of what was going on, some of the changes in the market, in the financial system. and those who really did know about it, didn't see any percentage at all in calling our attention to it. one of which was the repurchase market, the repo market. at the time of the crisis, that was described as a freeze in be interbank -- as a freeze in interbank lending. but it really was a traditional run. the only proposal that seems to -- and as i understand it, the repo market, um, was approximately the same size every ni

mr. obama? >> guest: well, i'm not privy to any discussions that secretary geithner may or may not have on the rating agencies, on the substance, if they're doing their job they have to be looking at a fiscal picture that just doesn't add up and at some point it will b their obligation to say that quite clearly in the form of not just a negative watch or a negative outlook but they will actually haveo downgrade the united states. we're not immune from the laws of arithmetic or economics. we're perilously close to the edge that looks like greece and other sovereign debt crises. they're doing their job when they say you've got to get your house in order. we shouldn't let that happen. the consequences are, in my view, simply catastrophic. we've seen dwight, what happens when financial markets melt down. a downgrade either because of a failure -- failure to raised debt ceiling or failure to deal with the problem is something that means higher interest rates for everybody in the united states and higher costs for the government forever. the economy's weak. we don't need that tomorrow, jennifer rubin and g