“Treasury’s Lew Warns That US Default Could Happen Quickly” – Reuters

Posted on :Feb 03, 2014

Reuters

February 3, 2014

The Obama administration warned on Monday it could start defaulting on the  government’s obligations “very soon” after hitting a limit on the national debt  later this month.
Treasury Secretary Jack Lew said the federal  government should hit the ceiling by the end of February unless Washington  raises the nation’s limit on public borrowing.
The federal government  would then burn through its remaining cash more quickly that it would at other  times of the year because the Treasury will be issuing tax refund checks, Lew  said.
“Without borrowing authority, at some point very soon, it would  not be possible to meet all of the obligations of the federal government,” Lew  said in prepared remarks at a Bipartisan Policy Center event.
Washington  will start scraping up against the debt ceiling by Friday, the day a suspension  on the borrowing limit is scheduled to lift.
The Treasury will then use  accounting measures that will allow the government to keep adding to the debt,  but Lew said this strategy would only get the administration to the end of the  month.

© 2014 Thomson/Reuters.  All rights reserved.

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