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Financial Planning > College Planning > Student Loan Debt

Geithner, Ryan Clash Over Government Debt Limit

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The Sunday talk shows were full of debt limit talk, with the thorny issue of an increase in the debt limit still in doubt. Treasury Secretary Timothy Geithner said on ABC's This Week with Christiane Amanpour that Republicans had assured the president that they would raise the debt limit, acknowledging that not to do so could be catastrophic. But Rep. Paul Ryan, R-Wis., said no such deal had been made and that an increase in the debt limit would have to come as part of a deal on spending.

U.S. Treasury Secretary Timothy GeithnerGeithner (left) emphasized to both Amanpour and David Gregory on Meet the Press that Congress recognized the requirement that the debt limit be raised in order to avoid catastrophe. He pointed out numerous problems that would occur if the limit was not raised—failure to make Social Security, Medicare, Medicaid and veterans benefit payments, default on interest payments and federal obligations—and said that such failures would "tip the U.S. economy and the world economy back into recession, depression." Such a "tragedy," he said, "would have a permanent devastating damage on our credit rating as a country."

Rep. Paul RyanRyan (right), however, on CBS' Face the Nation, told Bob Schieffer something very different. He said that Republican leaders had not told him, as Geithner said they had told the president, that they would not stand in the way of a debt limit increase. Then he said that any debt limit increase would have to come as part of a deal to limit future spending.

He also said that Republicans would not vote for an increase to the debt ceiling alone, that it would have to be part of a package of "spending cuts and controls," and that May 16 was not a hard and fast deadline. Geithner had cited May 16 as the date by which the limit would have to be raised, unless the government was willing to take such extraordinary measures as dipping into government pension funds and other cash flow strategies that could forestall the ceiling until July 8.


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