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White House Openly Threatens U.S. Default As Debt Fight Escalates
Oct 7th, 2013
Daily NewsThe Telegraph
Categories: Today's Headlines;Contemporary Issues

US Treasury Secretary Jacob Lew has issued a categorical warning that the United States will default on its $16.7 trillion debt and throw the world into turmoil unless Congress agrees to raise the legal debt ceiling by October 17.

“Congress is playing with fire. If the US government, for the first time in its history, chooses not to pay its bills on time, we will be in default,” said Mr Lew.

“Anyone who thinks that the United States government not paying its bills is anything less than default hasn’t thought about it very clearly,” he told NBC’s Meet the Press.

Mr Lew said the treasury had already exhausted its normal funds in May and has been “creating room” by resorting to one-off tricks, but these, too, have run dry. The government will have just $30bn by October 17, half what is needed to cover immediate needs over subsequent days.

“That is a dangerously low level of cash, and we’re on the verge of going into a place we’ve never been. Even getting close to the line is dangerous,” he said.

Mr Lew’s dramatic comments mark a further escalation in the game of chicken on Capitol Hill. They suggest that the White House has for now ruled out a drastic fiscal squeeze to balance the books if there is no deal, and is unwilling to contemplate exotic loopholes – such as a $2 trillion platinum coin – to circumvent the will of Congress.

Let the Headlines Speak
Oct 7th, 2013
Daily NewsFrom the Internet
Categories: Today's Headlines;Contemporary Issues

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Boehner Says U.S. on Path to Default If Obama Won’t Negotiate
Oct 7th, 2013
Daily NewsTrue News
Categories: Today's Headlines;Contemporary Issues

Republican House Speaker John Boehner vowed on Sunday not to raise the U.S. debt ceiling without a “serious conversation” about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default.

“The nation’s credit is at risk because of the administration’s refusal to sit down and have a conversation,” Boehner told ABC’s This Week, adding that there were not enough votes in the House of Representatives to pass a “clean” debt limit bill, without any conditions attached.

Asked if that meant the United States was headed towards a default if President Barack Obama did not negotiate ahead of an Oct. 17 deadline to raise the debt ceiling, Boehner said: “That’s the path we’re on.”

The comments appeared to mark a hardening since late last week when Boehner was reported to have told Republicans privately that he would work to avoid default, even if it meant relying on the votes of Democrats, as he did in August, 2011.

Republicans and Democrats also traded blame for a shutdown that has brought much of the government to a standstill for nearly a week. With no end in sight, the battle over funding the government has merged into the one over the debt ceiling.

Republicans have demanded that Democrats agree to delay implementation of the Affordable Care Act, the landmark 2010 law popularly known as Obamacare, as part of any spending bill.

They have also been seeking measures to address the federal government’s long-term debt in exchange for raising its $16.7-trillion (U.S.) debt limit. If the borrowing cap is not increased, the United States could go into default, with what officials and economists say would be seriously damaging consequences for the U.S. and global economies.

“I don’t want the United States to default on its debt,” Boehner said. “But I’m not going to raise the debt limit without a serious conversation about dealing with problems that are driving the debt up. It would be irresponsible of me to do this.”

Treasury Secretary Jack Lew warned of serious consequences if “the unthinkable” were to happen and the United States defaulted. “It is irresponsible and it is reckless to take that chance, which is why Congress needs to act,” he told Fox News.

He told CNN: “On the 17th we run out of our ability to borrow, and Congress is playing with fire.”

Senator Ted Cruz, who has been the standard-bearer for Republican opposition to funding the government without measures to undercut Obama’s healthcare law, told CNN that Congress frequently in the past had attached curbs on spending to votes to raise the debt ceiling.