"If Congress does not raise the debt limit, “the Treasury
would be forced to default on legal obligations of
the United States, causing catastrophic damage to the
economy, potentially much more harmful than the effects
of the financial crisis of 2008 and 2009. "
Timmy neglected to mention
the catastrophic damage to grandchildren
with additional debt dumped on their backs.
The Wall Street Journal
By Meena Thiruvengadam
and Jeffrey Sparshott
WASHINGTON (Dow Jones)--As the U.S. approaches its debt limit of nearly $14.3 trillion, Treasury Secretary Timothy Geithner is pushing lawmakers to lift that ceiling for the sixth time in less than four years.
Failure to raise the debt limit could "precipitate a default by the United States," Geithner said, in a letter to lawmakers Thursday.
A U.S. default could have "catastrophic economic consequences that would last for decades," Geithner said, describing a default as a long-lasting tax on Americans that could lead to the loss of millions of jobs.
The government is expected to run up against its debt ceiling during the second quarter of this year. Geithner is pushing for Congress to approve a debt-ceiling increase in the first quarter.
Failure to raise the ceiling could cast doubt on the U.S. government's ability to meet its obligations. But many conservative candidates ran election campaigns criticizing their opponents for voting to lift the debt ceiling last year, and promised to vote against another increase when federal borrowing hits the current cap.
The U.S. House of Representatives agreed Wednesday to change voting procedures on increasing the nation's borrowing limit. The new policy means that lawmakers will be forced to go on record in support of raising government borrowing or vote "no" and risk putting the U.S. into default.
Previously, Congress had approved debt limits automatically as part of the budget resolution.
Jan. 6 (Bloomberg) -- Treasury Secretary Timothy F. Geithner today urged lawmakers to raise the federal debt limit in the first quarter of 2011, saying a failure to act could make it impossible for the U.S. to access global credit markets.
If Congress does not raise the debt limit, “the Treasury would be forced to default on legal obligations of the United States, causing catastrophic damage to the economy, potentially much more harmful than the effects of the financial crisis of 2008 and 2009,” Geithner said in a letter to Senate Majority Leader Harry Reid.
The Treasury estimates the debt limit could be reached as early as March 31, and “most likely” between that date and May 16. The debt limit stands at $14.29 trillion, leaving about $335 billion of “headroom,” Geithner’s letter said.