U.S. Republican lawmakers are considering a short-term increase in the country's borrowing authority so the United States does not default on its financial obligations.
Speaker John Boehner, leader of the Republican-controlled House of Representatives, asked his colleagues to support the increase in the country's $16.7 trillion debt ceiling, perhaps by a big enough figure so the U.S. could borrow more to pay all its bills for the next six weeks. Key Republican leaders are then headed to the White House to talk with U.S. President Barack Obama about the plan.
That debt extension, if it happens, possibly would give Republicans a chance to negotiate spending cuts with Mr. Obama, who has called for an increase in the borrowing limit without conditions.
But an increase in the borrowing authority would not end Washington's other financial dilemma -- the government's partial shutdown, now in its 10th day.
Treasury Secretary Jack Lew told a Senate panel that the country will reach its borrowing authority in a week, and that it would be a "grave mistake" to fail to increase it.
By next Thursday, he said the Treasury would only have about $30 billion on hand and some incoming revenue, but not enough to pay all its bills.
He said the government should not have to make "perilous choices" whether it uses its available cash to pay government bond holders, pension and health benefits owed to older Americans, aid to military veterans or businesses that provide services to the government.
"The United States should not be put in a position of making such perilous choices for our economy and our citizens. There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets."
But Lew declined to say how much of an increase Mr. Obama wants in the debt ceiling, other than to say it should cover borrowing needs for a longer, rather than shorter period of time.
The debate over increasing the U.S. debt limit comes in the midst of the government shutdown because of a stalemate between Mr. Obama, a Democrat, and his Republican opponents in Congress over government spending priorities and the implementation of widespread health care reforms that are his signature legislative achievement.
Senator Max Baucus, the Democratic chairman of the Senate Finance Committee, said that while the government shutdown "has been disruptive, a default would be a financial heart attack."
Republican Orrin Hatch criticized Mr. Obama for not negotiating over government spending issues while asking for an increase in the country's debt limit without conditions.
Hatch noted that in 2006, then-Senator Obama called a proposed increase in the debt ceiling at the time a "failure of leadership," when Republican President George W. Bush was in office. Hatch said the borrowing limit has since been increased seven times during Mr. Obama's term in the White House, from $11.3 trillion to the current $16.7 trillion.
The standoff over the government shutdown between Republicans and Mr. Obama is chiefly over the president's health care law that by January will require most Americans to buy health insurance or pay a fine, a mandatory provision that Republicans staunchly oppose.
Republicans had originally sought to either end spending for the law or delay it in exchange for halting the shutdown and raising the debt ceiling, and Boehner has called on Mr. Obama to hold negotiations before letting the House vote.
But the president says he will not negotiate until Congress approves the issues without any conditions. The partial shutdown has halted numerous government services, including death benefits to the families of U.S. service members killed in combat. The public backlash prompted the House to vote unanimously Wednesday to restore the benefits. The measure now goes to the Senate.
The Pentagon has reached an agreement with a private charity to pay the benefits until funding is restored.
Speaker John Boehner, leader of the Republican-controlled House of Representatives, asked his colleagues to support the increase in the country's $16.7 trillion debt ceiling, perhaps by a big enough figure so the U.S. could borrow more to pay all its bills for the next six weeks. Key Republican leaders are then headed to the White House to talk with U.S. President Barack Obama about the plan.
That debt extension, if it happens, possibly would give Republicans a chance to negotiate spending cuts with Mr. Obama, who has called for an increase in the borrowing limit without conditions.
But an increase in the borrowing authority would not end Washington's other financial dilemma -- the government's partial shutdown, now in its 10th day.
Treasury Secretary Jack Lew told a Senate panel that the country will reach its borrowing authority in a week, and that it would be a "grave mistake" to fail to increase it.
By next Thursday, he said the Treasury would only have about $30 billion on hand and some incoming revenue, but not enough to pay all its bills.
He said the government should not have to make "perilous choices" whether it uses its available cash to pay government bond holders, pension and health benefits owed to older Americans, aid to military veterans or businesses that provide services to the government.
"The United States should not be put in a position of making such perilous choices for our economy and our citizens. There is no way of knowing the irrevocable damage such an approach would have on our economy and financial markets."
But Lew declined to say how much of an increase Mr. Obama wants in the debt ceiling, other than to say it should cover borrowing needs for a longer, rather than shorter period of time.
The debate over increasing the U.S. debt limit comes in the midst of the government shutdown because of a stalemate between Mr. Obama, a Democrat, and his Republican opponents in Congress over government spending priorities and the implementation of widespread health care reforms that are his signature legislative achievement.
Senator Max Baucus, the Democratic chairman of the Senate Finance Committee, said that while the government shutdown "has been disruptive, a default would be a financial heart attack."
Republican Orrin Hatch criticized Mr. Obama for not negotiating over government spending issues while asking for an increase in the country's debt limit without conditions.
Hatch noted that in 2006, then-Senator Obama called a proposed increase in the debt ceiling at the time a "failure of leadership," when Republican President George W. Bush was in office. Hatch said the borrowing limit has since been increased seven times during Mr. Obama's term in the White House, from $11.3 trillion to the current $16.7 trillion.
The standoff over the government shutdown between Republicans and Mr. Obama is chiefly over the president's health care law that by January will require most Americans to buy health insurance or pay a fine, a mandatory provision that Republicans staunchly oppose.
Republicans had originally sought to either end spending for the law or delay it in exchange for halting the shutdown and raising the debt ceiling, and Boehner has called on Mr. Obama to hold negotiations before letting the House vote.
But the president says he will not negotiate until Congress approves the issues without any conditions. The partial shutdown has halted numerous government services, including death benefits to the families of U.S. service members killed in combat. The public backlash prompted the House to vote unanimously Wednesday to restore the benefits. The measure now goes to the Senate.
The Pentagon has reached an agreement with a private charity to pay the benefits until funding is restored.