Treasury Secretary Jack Lew pressed Congress on Monday to allow the government to borrow more money, saying that it could default on its obligations if lawmakers do not act by mid-October.
“Congress should act as soon as possible to protect America’s good credit by extending normal borrowing authority well before any risk of default becomes imminent,” Lew said in a letter to congressional leaders.
The borrowing limit lift does not lead to increase in spending; rather, it allows the Treasury to pay expenditures Congress has previously approved, he said.
“If investors should become unwilling to loan the United States money, the United States could face an immediate cash shortfall,” Lew said.
In the summer of 2011, a fight over the government’s debt limit turned into a crisis that weighed heavily on markets.
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