Jack Lew: U.S. Default Could Happen Quickly
The Obama administration warned on Monday it could start defaulting on the government's obligations "very soon" after hitting a limit on the national debt later this month.
Treasury Secretary Jack Lew said the federal government should hit the ceiling by the end of February unless Washington raises the nation's limit on public borrowing.
The federal government would then burn through its remaining cash more quickly that it would at other times of the year because the Treasury will be issuing tax refund checks, Lew said.
"Without borrowing authority, at some point very soon, it would not be possible to meet all of the obligations of the federal government," Lew said in prepared remarks at a Bipartisan Policy Center event.
Washington will start scraping up against the debt ceiling by Friday, the day a suspension on the borrowing limit is scheduled to lift. The Treasury will then use accounting measures that will allow the government to keep adding to the debt, but Lew said this strategy would only get the administration to the end of the month.