U.S. hits $14.3 trillion debt ceiling

Federal government taps into pension fund to avoid default

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.

Washington Post

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