Treasury Secretary Tim Geithner sent a letter to U.S. Sen. Harry Reid Monday warning the lawmaker that severe economic hardship could impact the United States when the nation reaches its debt limit on May 16.
Geithner said without a raise to the debt ceiling prior to that date, the Treasury Department
will have to employ drastic measures to protect the economic viability of the United States.
"If the debt limit is not increased by May 16, the Treasury Department has authority to take certain extraordinary measures," Geithner wrote. He added "to temporarily postpone the date that the United States would otherwise default on its obligations."
Geithner warned, "The longer Congress fails to act, the more we risk that investors here and around the world will lose confidence in our ability to meet our commitments and our obligations."
The Treasury secretary said he will use all measures available to him to protect the country's creditworthiness if Congress does not raise the ceiling by May 16.
He added, "If Congress failed to increase the debt limit, a broad range of government payments would have to be stopped, limited or delayed, including military salaries and retirement benefits, Social Security and Medicare payments, interest on the debt, unemployment benefits and tax refunds. This would cause severe hardship to American families and raise questions about our ability to defend our national security interests."
Write to Kerri Panchuk.