The United States reached its statutory debt limit of $14.3 trillion on Monday and the Treasury Department took steps to create additional headroom to avoid a government default.
Treasury Secretary Timothy Geithner declared a “debt issuance suspension period” for the Civil Service Retirement and Disability Fund, permitting the Treasury to redeem a portion of existing Treasury securities held by that fund as investments and suspend issuance of new Treasury securities to that fund as investments. He also suspended the daily reinvestment of Treasury securities held as investments by the Government Securities Investment Fund of the Federal Employees’ Retirement System Thrift Savings Plan.
Geithner also continued to urge Congress to raise the debt limit in a timely manner in order to uphold the full faith and credit of the United States. In a letter to Senate Majority Leader Harry Reid, D-Nev., and other congressional leaders, he wrote, “I have written to Congress on previous occasions regarding the importance of timely action to increase the debt limit in order to protect the full faith and credit of the United States and avoid catastrophic economic consequences for citizens. I again urge Congress to act to increase the statutory debt limit as soon as possible.”
Republican congressional leaders have said they would only agree to raise the debt limit in exchange for deep spending cuts.
"The President’s request to raise the debt limit is the perfect time to pass significant spending reductions and reform entitlement programs," said Senate Minority Leader Mitch McConnell, R-Ken., last Friday. "If we want these programs to be sustainable in the future, without creating an unsustainable burden for future generations, we must take this opportunity to get serious, now."
“It comes as no surprise that Washington's spending spree has resulted in us once again reaching the statutory debt limit,” said House Ways and Means Chairman Dave Camp, R-Mich., in a statement Monday. “The American people have no interest in simply increasing the limit absent serious steps to rein in spending. I urge the Administration to demonstrate the leadership America expects from Washington and work with the Congress to enact significant reductions in government spending—including entitlement programs like Medicare—as well as needed structural reforms to how Washington sets the nation's budget.”
