–Treasury Secretary Repeats Call For Prompt Passage of Debt Hike
–Admin Seeks ‘Multi-year’ Deficit Cut Plan
–Admin Wants Corporate Tax Reform Accord Soon
–China’s FX Reform Is ‘Moving Very Gradually’
–Need To ‘Wind Down’ Gov Involvement With GSEs

By John Shaw

WASHINGTON (MNI) – Treasury Secretary Tim Geithner Wednesday
expressed his frustration with the U.S.’s politically contentious ritual
of increasing the statutory debt ceiling, saying that “no other country
on the planet” has created comparable debt limit “torture.”

“It’s not a way to run a country,” he said of the regular battle to
increase the debt ceiling — after spending and revenue decisions that
caused the rise in debt have already been made.

Geithner said the “best and easiest” step for Congress to take is
pass a clean debt ceiling increase and tackle broader fiscal issues in
other legislation.

“We don’t play around with this stuff,” he warned. “The stakes are
too high.”

He urged policymakers not to further complicate the debt limit
challenge by passing legislation that would prioritize the payment of
interest and principal to bondholders over other government bills.

Geithner said such an approach might confuse and unsettle financial
markets.

Geithner made his remarks at a House Budget Committee hearing where
he testified on the administration’s fiscal year 2012 budget. He also
was questioned on a host of other issues.

Geithner said that Congress and the White House should work on a
plan to tackle long-term budget deficits.

“We need a multi-year plan,” Geithner said, adding that a
comprehensive multi-year package is far more credible than annual
spending cut bills.

Geithner said that it is “very important” for the U.S. to preserve
its AAA credit rating.

He repeated his call for bipartisan work on corporate tax reform,
saying that would like to see the corporate tax rate lowered and the tax
base expanded. The plan should also be revenue neutral.

He said as a general rule that tax cuts should be offset. “Tax cuts
aren’t free. We have to borrow money to finance them,” he said.

The Treasury secretary said he is encouraged by the recent rise in
the value of the yuan. “They are now moving very gradually,” he said of
China’s leadership, adding he believes Chinese leaders have decided
that the yuan should rise.

In response to several questions, Geithner briefly explained the
administration’s White Paper on Fannie Mae and Freddie Mac. “We need to
wind them down,” he said, but added “you got to do it carefully.”

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]