Texas Insider Report: WASHINGTON D.C. The United States government on Monday reached its official debt limit of $14.3 billion triggering a two-month-plus period of tapping other resources until politicians negotiate a solution. In years past Congress has cooperated and raised the debt ceiling but the enormous debt has become a political rallying cry for opposition Republicans and a focus of worry for the international community.
U.S. Treasury Secretary Timothy Geithner informed the Congress in a letter that he had declared a debt issuance suspension period.
The formal step frees up borrowing from the retirement and disability funds for federal workers and other sources including the Government Securities Investment Fund.
Vice President Joe Biden began earlier this month to moderate talks between left-leaning Democrats who want to dismantle temporary tax breaks to boost revenues while reducing spending and conservative Republicans who insist that federal entitlement programms such as medical aid for the elderly and poor must be reduced.
Republicans also want tax breaks for people earning more than $250000 dollars a year to be kept in
place.
President Obama warned Sunday that failure to increase the debt limit could disrupt the global financial system and plunge the nation into another recession.
Geithner noted in his letter that the bridging measures would end on August 2 when the Department of the Treasury predicts that the borrowing authority of the United States will be exhausted.
