Congress asked to raise debt limit

WASHINGTON –The United States could face the prospect of not being able to pay its bills this fall unless Congress raises government borrowing authority now capped at $7.4 trillion, Treasury Secretary John Snow said Monday.

In a letter to House and Senate members, Snow said the government is expected to reach the current statutory ceiling on the national debt by late September or early October.

Even if Treasury takes steps to juggle accounts to stay just under the limit to avoid defaulting on the debt, “we can finance government operations no longer than mid-to-late November,” Snow wrote. The government has performed such maneuvers in the past.

He urged Congress to raise the debt limit as soon as possible. He did not suggest a specific amount.

Boosting the debt limit is more a matter of politics than economics.

Economists doubt Congress will reject Snow’s call. A federal default is considered unimaginable because it would rattle bond markets and force interest rates higher.