Tim Geithner: “Our Fallback To Our Fallback Plan Is The Congress To Pass The Debt Limit”

Tim Geithner

“Our fallback to our fallback plan is the Congress to pass the debt limit,” U.S. Treasury Secretary Tim Geithner said at a Politico event this morning.

Geithner denied he will be the first U.S. Treasury Secretary to preside over a default. He read over the 14th Amendment, citing it as a reason why using the debt ceiling as a negotiating tool was something he didn’t understand. He described the current debate of the debt ceiling as “theatre.”

Fourteenth Amendment, section 4:

The validity of the public debt of the United States, authorised by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

On Greece, Geithner says its “within Europe’s capacity to manage this without collateral damage.” He said the problem of Greece is “containable.”

Geithner on IMF:

  • Allegations post Strauss-Kahn: Geithner explained that it’s hard for him, as a man, to explain what it is like for a woman to work there and suggested Politico as a woman about that experience. He said the IMF did have strict ethical standards and that Strauss-Kahn has not contacted him.

  • Next leader: Geithner explained that the IMF was set up in the wake of World War II, and that it needs to better reflect the world’s new balance of power. He believes that a contestable leadership campaign for the organisation is good. He points to Christine Lagarde and Augustine Carstens, of Mexico, as the two candidates and believes both are capable.

Geithner also said he’s never read or seen “Too Big To Fail.” He chalked it up to being too busy at first, but then admitted what might be a darker reason for not picking up the book.

“I have no interest in really reliving those dark moments of 2008,” Geithner said.

Geithner’s hair is also notably grayer since 2008.

“I don’t think anyone covered themselves with glory, or really distinguished themselves in that time,” Geithner said in response to a question on who did well amongst banks during the financial crisis.