US Treasury Secretary Jacob Lew warned Monday that the US is on course to hit its so-called debt ceiling, the limit to which it can legally borrow, by the end of the month.
He called on Congress to raise it immediately to prevent the issue from harming the economic recovery, adding that the government would start defaulting on its debt “very soon” if it failed to act.
“Time is short. Congress needs to act to extend the nation’s borrowing authority, and it needs to act now,” Mr Lew said in a speech on Monday.
“In just a matter of days, the temporary suspension of the debt limit will end, and the Treasury Department will have to start using extraordinary measures so the government can continue to meet its obligations,” he said at Washington think tank the Bipartisan Policy Center.
However Mr Lew cautioned that the government will burn through its leftover cash more quickly than normal because the Treasury will be issuing tax refunds.
“Now, unlike other recent periods when we have had to use extraordinary measures to continue financing the government, this time these measures will give us only a brief span of time.”
“Without borrowing authority, at some point very soon, it would not be possible to meet all of the obligations of the federal government,” he said.
Full article: US could start defaulting on debt ‘very soon’ warns Lew (The Telegraph)