Lew issues debt cap warning to Congress

AFP-JIJI

Treasury Secretary Jacob Lew urged Congress on Thursday to raise the U.S. borrowing ceiling, warning that not doing so could jeopardize Washington’s creditworthiness and raise fears of a default.

With the United States closing in on the point where spending will surpass available funds, Lew said it was crucial for Congress to raise the debt cap as soon as it resumes business at the beginning of September.

Failure to raise the ceiling would force spending cuts on many parts of the government, including the military and social security, and “have disastrous effects for our nation,” Lew told an audience in Mountain View, California.

“In just a few weeks, we will find ourselves once again perilously close to breaching the debt ceiling if Congress fails to act,” he said.

Lew pointed to a 2011 fight over the ceiling that went down to the wire, raising fears that the country would be forced to default on its debt.

Even after politicians struck a last-minute deal to raise it — in exchange for longer term spending reductions — the United States lost its gold-plate AAA credit rating for the first time ever.