Geithner Letter Warns Congress: We Will Hit the Debt Ceiling Soon
The United States expects to run out of tools to avoid a default between mid-February and early March, potentially causing lasting damage to the U.S. economy and its creditworthiness, the Treasury said on Monday.
In a letter to Congress, Treasury Secretary Timothy Geithner urged lawmakers to raise the $16.4 trillion legal limit on the nation's debt or risk "irreparable" economic harm.
If the borrowing limit is not increased, the United States could default on its debt and not make the 80 million payments the U.S. government sends out every month, including Medicaid and Medicare payments, military and law enforcement salaries, the Treasury said.
"It must be understood that the nation's creditworthiness is not a bargaining chip or a hostage that can be taken to advance any political agenda," Geithner said in the letter sent to top congressional leaders including Republican John Boehner, speaker of the House of Representatives.
A number of Republicans have said they would be willing to allow a U.S. debt default or a government shutdown to force the administration of President Barack Obama to accept deeper spending cuts than it would like.
But Obama on Monday rejected any negotiation with Republicans over raising the borrowing limit.
Geithner said the Treasury would later provide a more narrow timeline for when it believes it will no longer be able to pay the government's bills.
The timeline is somewhat uncertain because government tax revenues and refunds can be unpredictable.