Treasury Secretary Jacob Lew tried to take the looming fight over the debt ceiling to Republicans on Thursday, challenging them to raise the limit without conditions as soon as they return from thwie August recess.
“I am calling on Congress today to raise the debt ceiling as soon as members get back to Washington after their summer recess,” Lew said in a speech to the Commonwealth Club of California in Mountain View.
Lew warned that the economy might not be able to weather another confrontation over the debt ceiling like the one in 2011, saying “we cannot afford another unnecessary self-inflicted wound.”
The Treasury bumped up against the debt ceiling in May, leaving publicly held debt at just under $16.7 trillion. By law, the Treasury cannot issue debt above that amount without congressional authorization.
Since May, the Treasury under Lew has taken measures to ensure that the federal government meets its obligations without accruing new debt. The Bipartisan Policy Center has estimated that the Treasury will exhaust those options and become unable to make payments on interest on the debt and other bills sometime between mid-October and mid-November. At that point, the government would risk defaulting on its debt, which would destabilize U.S. and world financial markets.
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