Treasury Secretary Timothy F. Geithner says the U.S. government will begin borrowing from the pension funds of federal workers on Monday in a bid to avoid defaulting on some of its obligations. The move comes as Washington is set to hit the $14.3 trillion debt ceiling, but it isn’t expected to buy the Obama administration more than a few months’ time. Geithner has repeatedly warned that Congress must agree to raise the debt limit before August 2 to avoid defaults that would send shockwaves through the global economy, but Congressional Republicans are demanding the increase be contingent on spending cuts. The White House has instead proposed a mix of spending cuts and tax increases to curb the federal debt.
U.S. hits $14.3 trillion debt ceiling
Federal government taps into pension fund to avoid default
FILED UNDER: U.S. budget