U.S. Treasury Secretary Timothy Geithner Tuesday said that time is running out for a deal to raise the U.S. debt limit, and wants a broad agreement with Congress in place by the end of next week at the latest.
Speaking at a finance symposium at the Treasury Department, Geithner vowed that Congress would raise the debt limit ahead of an Aug. 2 deadline when the government will risk default, adding, ``Failure is not an option.''
He said President Barack Obama will keep meeting with congressional leaders until a deal to raise the debt limit and slash future deficits is reached.
``We know we don't have a lot of time,'' Geithner said. ``I think the leaders understand we don't have a lot of time, and we want to wrap up the broad outlines of an agreement by the end of this week -- certainly by the end of next week -- so that we have time to legislate it and put it in place.''
He told the Women in Finance Investment -- a group whose members manage some $700 billion in U.S. savings assets -- that it was important for investors to know that ``the U.S. will act in advance of the limit that we face when our borrowing runs out on Aug. 2.''
Thus far, U.S. Treasury yields have reflected little concern about default among investors and have benefited from safe-haven capital flows amid continuing financial turmoil in Europe and weak economic data. The benchmark 10-year Treasury note yield was well below 3 percent, dipping to its lowest point since early December early on Tuesday.
That could change as the Aug. 2 deadline approaches if no deal is in place.
Geithner also said that any deal to cut deficits would have to be good for U.S. economic growth and would have to include some increased tax burden for the wealthy.
He said Obama has shown willingness to make some responsible cuts to entitlements and wants Republicans ``to do some difficult things too.''
``The president has proposed some very sensible tax reforms that would eliminate loopholes and ask the wealthiest Americans to pay a modest additional share of the burden,'' Geithner said.