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Geithner: US Spending Reforms Will 'Touch All Americans'

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hi, I'm Christine Tan and you're watching "Asia Market Daily".

While Tepco is still trying to get its nuclear power reactors under control - we're just a few months off from the peak power usage period in Japan.

According to Platts, when Summer arrives, there could be a major shortfall of up to 13,500 megawatts from the Tepco grid.

That is despite efforts to increase the number of oil and gas powered turbines, to close the gap in the power crisis.

(SOT) Jonty Rushforth, Senior Asia LNG Editor, Platts:
Tepco has to find quite a lot of LNG to meet its demand coming into summer. That for Tepco alone, we're probably looking at a 10 percent jump in LNG. For Tohoku again, quite significant, probably around 10 percent, something like that. As we've already seen over the weekend, Qatargas said they're diverting about 60 cargoes over the next year to Japan. That will probably meet maybe half of the requirement that we've been talking about for the next couple of months.

Jonty Rushforth of Platts says Japan's nuclear disaster certainly improves the attractiveness of gas globally.

However, he doesn't believe it will spell the end for nuclear power.

(SOT) Jonty Rushforth, Senior Asia LNG Editor, Platts:
Nuclear power is one of the low carbon energy sources that has a proven track record that can produce a vast amount of output and if you're looking at alternatives to that, it's not really clear where would be easy options. I mean within Japan they've pushed a lot of the hydro side already. If you look at shifting over to wind, well there's problems with that in terms of grid management that we've seen in Germany and we're beginning to see a bit of in the UK as well.

Elsewhere, Barack Obama and his team are scrambling to maintain America's credit worthiness, as its budget deficit soars.

The only option now is raising the national debt ceiling.

And U.S. Treasury Secretary Timothy Geithner says political infighting will not keep Congress from doing so.

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Timothy Geithner, U.S. Treasury Secretary:
If you allow people to start to doubt whether the United States of America will meet its obligations, that would be catastrophic, and we can't take that risk. But again, the responsible people up there understand that, and I'm very confident they'll do this. And I heard them say that, that to the president on Wednesday. Again, they said that, 'we recognize we can't play around with this'.

David Gregory, NBC:
Do you think this risks another shutdown?

Timothy Geithner:
I don't think so. Again, I think if you, if you listen carefully, I know there's a lot of politics in the moment, but if you listen carefully to what people are saying, a very important thing has happened. You've seen the Republican leadership say we need to try and cut about $4 trillion from our deficit over about 10 years. You saw a bipartisan fiscal commission the president established lay out basically the same target. And the president of the United States on Wednesday laid out a balanced, responsible plan that achieves about the same level of deficit reduction over about the same period. We take a little longer because we want to go a little more gradually. But when you have leadership of Republicans and Democrats saying that, 'this is the right thing to do for the economy now; we all agree on how much you have to do,' that's very important. And what we like Congress to do is, again, before we get too far into June we want Congress to agree on concrete targets, deadlines, timelines, and an enforcement mechanism that will force Congress to live within its means over the next three to five years.

David Gregory:
By next fall, yes, it's the election calendar, do you think unemployment is still above 8 percent?

Timothy Geithner:
If you look at what private economists say about the economy, you know, there's a lot of uncertainty in forecasts, no magic in forecasts, there's much more confidence now that we're going to have pretty steady, solid growth over this period of time, and enough jobs created that you're going to see the unemployment rate fall to 8 percent, some people say below 8 percent, by the end of 2012. But, again, that's private economists and this is, you know, obviously, inherently uncertain.

David Gregory:
But can you really pursue a policy where you cut the deficit if you exempt the middle class from any pain in terms of tax hikes?

Timothy Geithner:
No, absolutely. This has to be balanced. It's going to touch all Americans. The framework the president laid out on Wednesday of this week was a comprehensive balanced set of cuts on spending, things that'll affect...

David Gregory:
Right, but I'm asking about taxes, because he says, 'no, no way am I raising taxes on those making $250,000 or less.'

Timothy Geithner:
Well, well, let me just say, these spending restraints, spending reforms the president talked about, they will touch all Americans. Now, on the tax side, if you look at the way our tax code is structured, and it's a broken tax code, we spend hundreds of billions of dollars a year on special tax expenditures, special tax breaks that go to the, just the top, the wealthiest Americans. So we have plenty of room in this tax code that there's just a modest increase in the burden on the most fortunate.

David Gregory:
The real question I think is whether it's possible between now and election, rather than entitlement reform, can you get tax reform done? General Electric that didn't pay taxes last year, other companies that have been targeted, Google and others. Are there too many loopholes out there?

Timothy Geithner:
Well, what we want to do is have a corporate tax system where we have a lower corporate rate, and we clean up these special tax shelters, special tax expenditures to make sure we can afford to do that, not add to future deficits. But the key thing is to do this in a way that makes the economy stronger, more competitive, and makes it more likely that these great companies in the world build their next plant in the United States. So you want a tax reform, you want a corporate tax system that makes it more likely, that encourages investment in this country. That'll make it stronger going forward. And we think we can do that. And, and this is an area, David, where I think you're going to find broad bipartisan support.

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That wraps up the latest "Asia Market Daily".

I'm Christine Tan from CNBC, thanks for watching.

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