The Washington Post
Treasury Secretary Jack Lew warned congressional leaders Wednesday that he will exhaust emergency borrowing measures "no later than Oct. 17," leaving him with less than $30 billion on hand to pay the nation's bills.
In a letter sent to all members of Congress, Lew urged immediate action to raise the federal debt limit, which stands at $16.7 trillion. Without additional borrowing authority, Lew warned, cash on hand "would be far short of net expenditures on certain days, which can be as high as $60 billion."
"If we have insufficient cash on hand," the letter said, "it would be impossible for the United States of America to meet all of its obligations for the first time in our history."
The letter comes a week after Treasury closed the books on the most recent round of quarterly corporate and individual income tax receipts, which Lew previously warned were running a bit behind expectations. It marks the first time Lew has given lawmakers a hard deadline for raising the debt limit; he had previously said he would exhaust emergency borrowing measures in "mid-October."
Lew also cautioned that a move by House Republicans to order Treasury to "prioritize" its payments in the event it ran short of funds "would not protect the full faith and credit of the United States" because "any plan to prioritize some payments over others is simply default by another name."
"The United States should never have to choose, for example, whether to pay Social Security to seniors, pay benefits to our veterans, or make payments to state and local jurisdictions and healthcare providers under Medicare and Medicaid. There is no way of knowing the damage any prioritization plan would have on our economy and financial markets. It would represent an irresponsible retreat from a core American value: We are a nation that honors all of its commitments," the letter said.
READ FULL SOURCE ARTICLE: 09/25/2013
Editor's Note: Isn't prioritized spending something the Treasury should have in place already?
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