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Treasury: US to Exhaust Funds Oct 17 Without Debt Hike

Treasury: US to Exhaust Funds Oct 17 Without Debt Hike

The US Treasury said Tuesday that the government shutdown did not affect its position and it would still run out of funds on October 17 without a debt ceiling hike.

Treasury Secretary Jacob Lew told House of Representatives Speaker John Boehner in a letter that the partial shutdown of the government, which began Tuesday due to lack of a budget, would not materially change the projections he made last week for when the Treasury would hit its limit.

Although the lack of a budget for the new fiscal year “creates some additional uncertainty,” it would not change the Treasury’s position unless the impasse continues “for an extended time.”

Lew warned again that not increasing the debt ceiling by October 17 would force the US government to default on its obligations — though he did not specify which of those obligations it would likely fail to pay.

Congressional Republicans have refused both to pass a budget for the fiscal year which began Tuesday, and to raise the $16.7 trillion debt ceiling, as they push for political and fiscal concessions from the Democratic White House of President Barack Obama.

The country is running a deficit of about $60 billion a month and needs to raise that much from lenders to finance its deficit.

The Treasury has been able to operate just under the ceiling since May using “extraordinary measures” to adjust its accounts and continue to pay the country’s bills, from salaries and pensions to servicing debt.

But Lew said those measures have been exhausted and that new borrowing will be required by October 17, or some bills — or the debt — will go unpaid.

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