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BP Holdings: U.S. to exhaust borrowing capacity

U.S. to exhaust borrowing capacity by October 17: Treasury

 

(Reuters) - U.S. Treasury Secretary Jack Lew warned Congress on Wednesday that the United States would exhaust its borrowing capacity no later than October 17, at which point it would have only about $30 billion in cash on hand.

 

The fresh estimate adds another layer of pressure on lawmakers to raise the $16.7 trillion debt limit and comes as Congress struggles to pass a spending bill to keep the government funded beyond October 1, when the new fiscal year starts.

 

"If the government should ultimately become unable to pay all of its bills, the results could be catastrophic," Lew said in a letter to congressional leaders.

 

The fate of the debt ceiling is up in the air with Democratic and Republican lawmakers once again deeply divided over how to extend the Treasury's borrowing authority.

 

The Republican-controlled House of Representatives, which used the debt ceiling to extract fiscal concessions from Democrats in 2011, is focused on dismantling Obama's healthcare law in exchange for their debt limit vote.

 

House Republican leaders said there is no decision yet on what might be contained in a debt limit bill that could hit the House floor as early as Friday.

 

But President Barack Obama has said he will not negotiate with Republicans on extending the Treasury's borrowing capacity and Democratic lawmakers are pushing for a clean debt limit increase.