REPUBLIKA.CO.ID, WASHINGTON DC - The Obama administration warned Congress on Thursday that the government could run out of borrowing authority needed to help pay its bills as soon as February if lawmakers do not swiftly raise the federal debt ceiling.
"I respectfully urge Congress to take action to raise the debt limit at the earliest possible moment," Treasury Secretary Jack Lew said in a letter to congressional leaders.
Congress passed a two-year budget deal on Wednesday to trim some spending cuts planned for next year, and the pact reduces the risk of a government shutdown. But the legislation does nothing to avoid a potential unprecedented US debt default that could occur if Washington does not raise the borrowing cap soon.
In October, Congress and the administration suspended a 16.7 trillion USD cap on borrowing until February 7. If the debt ceiling isn't raised by then, Treasury will be able to juggle money between government accounts for a few weeks to keep just under the new limit.
But Lew said the department would exhaust these so-called extraordinary measures sometime between late February and early March. After then, it would no longer be able to borrow to cover its expenses.
Once it loses the ability to borrow, Treasury would pay its bills by relying on incoming revenue and any cash left in public coffers. After the money runs out, the government could start missing payments on its debt and other obligations, such as Social Security pensions. Many economists think a US default could trigger a financial panic and perhaps even an economic depression.
Ikuti Whatsapp Channel Republikasumber : Reuters
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