The coming week will see a return to fiscal drama in the U.S. Capitol with lawmakers scrambling to raise the federal borrowing limit before they adjourn for a week-long recess.
Democrats and Republicans have yet to agree on a formula to boost the debt ceiling, and failure to act would leave the U.S. government unable to pay all its bills by the end of the month.
President Barack Obama and his Democratic allies in Congress are demanding a conditions-free increase in the government's debt ceiling.
House Minority Leader Nancy Pelosi says prompt action is needed to keep the U.S. solvent.
“This is not a matter of negotiation," Pelosi said. "This is the full faith and credit of the United States of America.”
Republicans control the House of Representatives and are debating whether to attach items to a debt ceiling bill.
“We are still looking for the pieces to this puzzle," said House Speaker John Boehner. "But listen, we do not want to default on our debt, and we are not going to default on our debt.”
Republicans are endangering America’s fragile economic recovery, says Democratic Senator Patty Murray.
“They are once again putting our credit rating at risk. It is time for House Republicans to find their way out of this mess," she said.
U.S. Treasury Secretary Jack Lew says time is of the essence.
“The longer we wait, the greater the risks become," he said. "Whether it is the economic recovery, the financial markets, or the dependability of Social Security payments and military salaries, these are not things to put at risk.”
China and other creditor nations hold substantial amounts of U.S. debt. And the global financial community is taking note of the looming deadline.
“The U.S. economy has a lot of things going in its favor right now," said International Monetary Fund spokesman Gerry Rice. "Growth is strengthening, job creation has been relatively strong, and there is a new budget agreement. The last thing the U.S. economy needs is another confidence shock, such as a debate about whether the U.S. will honor its debt obligations.”
The U.S. national debt exceeds $17 trillion. The pace of debt accumulation has slowed over the last two years. But as long as debt continues to rise, Congress will periodically have to raise the nation’s borrowing limit, as it has done dozens of times in recent decades.