Treasury Secretary Timothy Geithner says that talks on a "comprehensive, balanced" budget deal between President Obama and Speaker of the House John Boehner have resumed after discussion between the two leaders came to a standstill on Friday, and he hopes that a framework on an agreement "should happen today."
"Both leaders recognize they're running out of time," Geithner said in an interview with "This Week" anchor Christiane Amanpour. "They need to get this process moving in the House on Monday night. To achieve that deadline, they need to have a framework that they know with great confidence will pass both houses of Congress, is acceptable to the President, and that should happen today."
Geithner said that there is progress being made, with two potential agreements on the table.
The first deal would include what Geithner called a "comprehensive, balanced set of savings on the spending side to help secure Medicare and Medicaid for the future, and tax reform that would generate revenues."
The other approach would be the plan by Senate Republican leader Mitch McConnell (R-KY) that would call for Congress to make proposed spending cuts in exchange for allowing the president to raise the debt ceiling.
"They can be combined in various forms," Geithner said. "But we can't adopt an approach that leaves a threat of default, and that would be deeply irresponsible to do."
"We are not going to default"
With the imminent opening of Asian markets, Geithner reassured the world economies that the United States would not default on its debt obligations.
"The leaders of Congress have said unequivocally, Republicans not just Democrats, that we will meet our obligations. We are not going to default," Geithner said. "What we're trying to do is to not just achieve that, but make sure that we put in place a framework that allows Congress to make the tough decisions we need to make to get our fiscal house in order."
He added that this would be a critical test for American politics to see if there could be bipartisanship to make a deal.
Geithner insisted that tax revenues must be part of an agreement, saying that the previously proposed $800 billion in revenue increases could be an acceptable figure, depending on the rest of the budget package.
"A balanced framework that's acceptable to the American people is going to have to require tax reform that generates more revenue," Geithner said.
He denied that last Friday that he and Boehner had a handshake deal that would raise $800 billion in revenues.
When asked about Boehner's comments at a Friday press conference mentioning a handshake deal, Geithner said that was simply "not true."
"We were very close, but we were not there yet," Geithner said. "But there was a whole range of things to be resolved when the Speaker pulled out on Friday."
But Geithner said that the back-and-forth is mostly part of the process of politics.
"There is a lot of politics there, but it [a budget deal] has to get done," Geithner said. "There is no choice. There's no alternative."
14th Amendment "Not a Workable Option"
Geithner rejected the idea of using the 14th Amendment that some constitutional scholars have argued gives the president authority to raise the debt ceiling on his own.
Last week, former President Bill Clinton said that if he were in President Obama's shoes, he would invoke the amendment to raise the debt limit "without hesitation, and force the courts to stop me."
"We've looked at this very carefully. As had President Clinton and his lawyers when he was president," Geithner said. "This is not a workable option to limit the damage to the American people that would come from Congress to avoid a default crisis."
Geithner said that a congressional vote on the debt ceiling would be the easiest way to deal with the looming Aug. 2 deadline.
But while raising the debt limit is the most pressing issue, he argued there is an opportunity for even greater progress on long-term deficit reduction.
"We think we need to take advantage of this moment," Geithner said. "We need to be able to get Congress to turn its attention to strengthening growth and getting more people back to work."