Geithner: Agree First on Deficit Cuts Size, Specifics Later

Treasury Secretary Timothy Geithner on Tuesday said bipartisan framework that sets targets for deficit reduction over the long-term could be agreed to in the next few months, but exactly how to go about that would not happen soon.

Geithner’s comments came a day after credit ratings agency Standard & Poor’s said policymakers in Washington needed to reach a deal to reduce the deficit by 2013. If not the agency said it would downgrade the U.S. credit rating from its pristine ‘AAA’ level.

“We have an opportunity now over the next two months to make some real progress,” Geithner told Bloomberg Television. “What we agree on is putting in place strong targets for savings, deficit reduction over a specific time frame with enforceable limits.”

The Republican leadership in Congress and President Barack Obama agree roughly on the size of deficit reductions the U.S. must achieve over the next 10 to 12 years – about $4 trillion and $4.4 trillion respectively - but are divided about how to go about it.

“We disagree on how to do that and we are not going to resolve on those disagreements in the next few months, but what we can do is lock in some clear targets for deficit reductions with a credible enforcement mechanism that will force Washington to live within its means,” he told CNBC.

“Now, it has to be a credible enforcement mechanism so the targets are meaningful and if we can do that I think that would provide a very positive signal and that would justify the confidence you see around the world in the United States today that this government is going to get ahead of this problem and not fall behind it.”

“People are going to see what we do. They’re going to look beyond what we say ultimately and they’ll look at what we are actually able to do together. That’s the important test,” Geithner told Fox News.