Jacob Lew, U.S. Treasury Secretary, predicts that the government debt will hit its cap in mid-October.
Lew is asking Congress to increase the government spending cap, which is currently at $16.7 trillion. He says that if the limit isn’t raised, then by mid-October the government will be left with $50 billion in cash. Lew says that this won’t be enough to take care of Social Security payments, military personnel salaries, Medicare and other programs for a prolonged time, reports MSN Money.
“We think the $50 billion cash balance indicates that Lew is right to raise the borrowing authority before mid-October,” Steve Bell, economic policy director at the Bipartisan Policy Center, told The Washington Post. “People may think it’s a big number, but these intergovernmental transfers that are paid every month to Social Security and Medicare are as big as $30 billion in one day.”
The last increase to the government borrowing limit occurred in 2011. At that time President Obama negotiated with lawmakers to increase the cap. Obama says that he won’t negotiate this time, reports MSN Money.
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