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Monday 25 July 2011

'Keep US govt. running for 18 months'

US Treasury Secretary, Timothy Geithner, urges congress to reach deal on raising the debt ceiling with only 10 days to a potential government shutdown.


"The most important thing is that we remove this threat of default from the country for the next 18 months," Geithner said in an interview with CNN. 

Talks between Obama and the Congressional leaders dissolved with no results on Saturday night, as the latest proposal for cutting the deficit and raising debt limit has hit a wall. 

The negotiation centers on a process to cut over USD 3 trillion in spending over 10 years as part of a deal to raise the country's USD 14.3 trillion debt ceiling by August 2. 

US President Barack Obama wants the debt reduction deal to include a combination of spending cuts and tax hikes, a proposal the Republicans in both houses of Congress have strongly oppose to. 

If Congress fails to raise the US debt ceiling by August 2, the United States Treasury would not be able to pay its bills, a condition which may lead to an increase in the interest rates and potentially would initiate global financial crisis. 

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