Geithner secures more time to break US budget stalemate

Timothy Geithner Despite the extension Timothy Geithner wants an urgent resolution to the deadlock

Related Stories

US Treasury Secretary Timothy Geithner has secured more time for Congress to negotiate a deal to increase the borrowing limit of the US.

Stalemate over the talks means the US risks defaulting on its debts because it will be unable to borrow beyond its $14.3 trillion (£8.6tn) limit.

Mr Geithner had previously said the deadline for a deal was 8 July.

But in a letter to Congress he said that better tax receipts meant the deadline could be extended to 2 August.

Republicans want to tie any agreement on the US budget to spending cuts, especially in the healthcare programme.

The Obama administration has proposed a $4tn package of budget cuts, but the Republicans say they do not go far enough.

Despite pushing back the deadline, Mr Geithner nevertheless warned Congress of the need for a urgent resolution to the impasse.

He said in his letter: "While this updated estimate in theory gives Congress additional time to complete work on increasing the debt limit, I caution strongly against delaying action."

Last month, ratings agency Standard & Poor's warned that the failure to agree a budget deal was damaging the financial credibility of the US.

In a surprise move, which hit share prices on both sides of the Atlantic, S&P downgraded its US credit rating outlook from stable to negative, increasing the likelihood that the rating could be cut within the next two years.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.