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U.S. hits debt limit and takes actions to postpone a default

The U.S. Treasury's accounting tricks buy 11 weeks for the White House and lawmakers to increase the debt ceiling.

May 16, 2011|By Jim Puzzanghera, Los Angeles Times

Sen. Pat Toomey (R-Pa.) said Geithner has "grossly exaggerated" what would happen Aug. 2. The government could choose to pay holders of U.S. securities ahead of all others, avoiding a government default. Others have suggested the U.S. could sell assets to avoid a default, including some of its gold reserves.

"It appears that the shrill statements and warnings ... are designed to intimidate Republicans in Congress to vote to raise the debt limit without getting the kind of spending cuts the Republicans want and the administration doesn't want," Toomey said.

He noted that Geithner has pushed the drop-dead date back several times.

But Obama and other administration officials have warned Congress not to tempt another recession and further fiscal disaster by using the debt ceiling as a bargaining chip in complex budget negotiations.

The news that the government had technically reached the debt limit Monday was "a reminder that we need to have a vote to lift the debt ceiling because the consequences of not doing so would be quite serious, indeed," said White House Press Secretary Jay Carney. "And those who suggest otherwise are whistling past the graveyard."

jim.puzzanghera@latimes.com

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