Treasury to max out borrowing again in October… All out of gimmicks…. U.S. stocks closed lower
Kerry speech to press about Syria Evidence of chemical weapons strike in Syria ‘undeniable’ YouTu
The U.S. will hit the $16.7 trillion debt ceiling in mid-October, Treasury Secretary Jacob J. Lew said in a letter urging Congress to raise the limit “as soon as possible.”
“Extraordinary measures are projected to be exhausted in the middle of October,” Lew said in the letter today to House Speaker John Boehner and other lawmakers.
“At that point, the United States will have reached the limit of its borrowing authority, and Treasury would be left to fund the government with only the cash we have on hand on any given day,” he said. He said the cash balance at that time is forecast to be about $50 billion.
The Treasury Department had earlier said it probably will be able to finance government operations by using special accounting measures until after Congress returns Sept. 9 from its recess. Lew said Aug. 22 a failure by Congress to raise the debt limit would “have disastrous effects for our nation” and could put at risk payments to Social Security recipients and veterans.
Boehner said last month the Republicans wouldn’t increase the debt ceiling “without real cuts in spending” that would achieve a further reduction in the deficit. Lew has said the Obama administration won’t negotiate on the debt limit.
The Bipartisan Policy Center, a nonprofit research group, has estimated that the U.S. will reach the point where it is unable to pay its bills sometime between mid-October and mid-November unless Congress increases the limit.
In a letter to congressional leaders, Lew said his department will soon run out of the accounting maneuvers it’s been using to stave off default.
“Congress should act as soon as possible to protect America’s good credit by extending normal borrowing authority well before any risk of default becomes imminent,” Lew said in his letter.
The deadline, sooner than what some other forecasters had estimated, comes amid concern that Congress has no plan for handling the needed increase in what promises to be a contentious debate between Republicans and Democrats.
The Obama administration has said it will not negotiate over raising the government’s borrowing limit.
NEW YORK (MarketWatch) — U.S. stocks closed lower in light volume Monday after Secretary of State John Kerry called Syria’s actions ‘inexcusable’ and a report said the U.S. would hit its debt limit in October.
Stocks had been modestly higher after a downbeat U.S. economic report did little to change the belief that the Federal Reserve would likely tighten monetary policy in September.
“The market is trying to build in ahead of time” the consensus view that the central bank would begin cutting back on its $85 billion in monthly bond purchases next month, and if not then, in December, Randy Frederick, managing director of active trading and derivatives at Charles Schwab, said of Wall Street’s pullback the past three weeks.
Stock indexes fell to session lows after Kerry told a nationally televised news conference that the United States would hold Syria’s government accountable for using chemical weapons. “By any standard it is inexcusable,” said Kerry of last week’s attack that the Syrian opposition said killed more than 1,300 people.