The Washington Post
The U.S. government is set to run out of borrowing authority in mid-October, leaving the government at a high risk of not having enough cash to fund all operations, including paying Social Security checks and military salaries, officials said on Monday.
The mid-October date creates a new cliffhanger for Washington, one that’s on the early side of what many analysts had anticipated.
In exchange for raising the $16.7 trillion debt limit, Republicans are demanding significant new spending cuts — and some are insisting on defunding or delaying President Obama’s signature health care law. Obama says he will not negotiate over the debt limit.
The Treasury Department could not say exactly when Congress would have to raise the debt limit or risk a federal default. In a letter to House Speaker John Boehner (R-Ohio), however, Treasury Secretary Jack Lew warned that the government would only have $50 billion in cash in mid-october, which may be “insufficient to cover net expenditures for an extended period of time.”
Lew said that if investors begin to doubt the U.S. government’s ability to pay back loans, “the United States could face an immediate cash shortfall. Indeed, such a scenario could undermine financial markets and result in significant disruptions to our economy.”
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