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January 14, 2013

Geithner warns 80 million federal payments at risk without lifting the debt ceiling

On top of President Obama's warning that the U.S. is "not a deadbeat nation," and that Republicans should raise the debt ceiling without delay, Treasury Secretary Timothy Geithner says some 80 million federal payments would be affected.

Geithner in a letter to congressional leaders says Treasury will exhaust the "extraordinary measures" it took to avoid bumping up against the debt ceiling between mid-February and early March. He said he expects soon to pinpoint the date, but that any estimate would be unpredictable due to the tax filing season.

"For this reason, Congress should act as early as possible to extend normal borrowing authority in order to avoid the risk of default and any interruption in payments," he wrote.

If the debt ceiling isn't lifted, he warns, some 80 million federal payments per month could be affected: That includes payments for Social Security; Supplemental Security Income; Medicare; Medicaid; national security needs, including military salaries, military retirement, veterans’ benefits, and defense contractors; income tax refunds; federal employee salaries and retirement; law enforcement and operation of the justice system; unemployment insurance; disaster relief; goods and services sold to the government under contracts with small and large businesses; and many others. 

"If Congress does not act to extend borrowing authority, all of these payments would be at risk," Geithner said. "This would impose severe economic hardship on millions of individuals and businesses across the country."

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