Default 'Off the Table,' Debt Deal Will Be Struck: Geithner

Treasury Secretary Tim Geithner told CNBC Monday that he is certain that congressional leaders will strike a deal to raise the federal debt ceiling prior to the Aug. 2 deadline to avoid default.

AP Timothy Geithner

“Each side has said definitively that default is not an option,” he said, “They’re not going to play around with this.”

“If the United States of America were to default it would be catastrophic for the American economy, for the American financial system, for the average American people, it would be a substantial unfair tax on all Americans and it would bring the world economy … to the edge of recession again,” he said. “There’s no alternative for Congress raising the debt limit and that’s why you’re seeing Republicans as well recognize that reality and take default off the table.”

He added that while it’s encouraging that congressional leaders are moving toward a debt agreement before the deadline, “of course it’s not enough.”

Geithner said the Obama administration and congressional leaders need to work toward addressing long-term deficits, while at the same time ensuring that Medicare and Social Security continue to be funded.

“We’re still working very hard and the president as he said last week that he wants us to work toward the biggest, the largest budget agreement we can,” he said.

When asked about recent reports that he has been contemplating stepping down, Geithner said he intends to stick around “for the foreseeable future.”