Geithner on GOP debt proposal: 'Harmful' and 'unworkable'
U.S. Treasury Secretary Timothy Geithner called the Republican debt plan not only "unworkable" but "harmful."
In a letter to Sen. Pat Toomey (R-Pa.) on Feb. 3, Geithner said a proposal to prioritize paying interest on the national debt is not reasonable, likening it to a homeowner paying his mortgage but not his utility bills.
"Although the mortgage would be paid, the damage to that homeowner's creditworthiness would be severe," he said, according to a Dow Jones report.
He said that Treasury officials said the plan "would not achieve your stated objective of improving U.S. creditworthiness."
Republicans have been calling for an immediate and unprecedented reduction in non-defense programs that could take more than $100 billion out of the economy over the next few months, casting their proposal as the best course for a full economic recovery. The Obama administration has not gone that far, instead calling for a five-year freeze in domestic spending, except for "investments" in education, infrastructure and research.
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