US Treasury Secretary Timothy Geithner went on the offensive one day after Standard & Poor's threatened to downgrade its top-tier rating on US government debt, saying there was "no risk" of a loss of the coveted rating. Prospects for a deficit reduction deal were improving, Geithner said on Tuesday as he appeared in a morning blitz of television shows - while saying in one appearance that he did not have to reassure foreign buyers of US debt in the wake of the S&P decision.
Geithner said that Democrats and Republicans now agree on the need to put in place "enforceable" targets to slash deficits by some $4 trillion over the next decade or so. "If you listen carefully now, you see the leadership of the United States of America ... recognising now this is the right thing to do for the economy," he told Fox Business Network.
Standard & Poor's on Monday threatened to downgrade its AAA rating on US Treasury debt unless the Obama administration and Congress find a way to slash the yawning federal budget deficit within two years. A downgrade would erode the status of the United States as the world's most powerful economy and diminish the dollar's role as the dominant global currency. It also would likely crank up borrowing costs, potentially hurting economic recovery as investors demand higher returns for holding US debt.
Geithner disputed S&P's finding that the US credit outlook was negative, and said it was difficult for people outside Washington to cut through partisan political rhetoric. "Actually, I think things are better than they've been if you want to think about the prospects for improving our long-term fiscal position," he said on CNBC.
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