After a government abeyance was abhorred on Friday with a $38 billion accent from the 2010 baseline budget, assembly accept a fresh hurdle to overcome: casual an access on the federal debt absolute to abstain behind on absorption payments on the civic debt -- a activity that will be over not billions, but a abundance dollars.
The federal debt absolute stands at $14.294 trillion. In adjustment to accumulate the government functioning, this charge be aloft decidedly by May 16 -- or "catastrophic" after-effects will result, according to Treasury Secretary Tim Geithner.
He said that this week's banking crisis was "modest in comparison" to what is advancing bottomward the road.
Without activity by Congress, a cardinal of government programs will wind up halted, bound or delayed -- including aggressive salaries and retirement benefits, Social Security and Medicare payments, absorption on the debt, unemployment allowances and tax refunds.
"Default by the United States would accelerate a crisis worse than the one we aloof went through," Geithner said to a Senate Appropriations subcommittee. "It would force us of advance to cut analytical payments to our seniors and it would be a reckless, capricious act to this country."
"I acquisition it extraordinary that the Congress would not act to access the limit," he said.
In adjustment to abstain a absence on absorption payments, Congress charge aggrandize the debt beam addition abundance dollars. The nine best contempo increases back 1997 accept averaged $977 billion in borrowing authority.
According to Geithner, any absence on payments by the United States will advance to abundant college absorption ante and borrowing costs for Americans, while consistent in crumbling home ethics and bargain retirement accumulation for bodies beyond America.
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