A group of Republican senators sent a letter to Treasury Secretary Timothy Geithner questioning his warning of a possible default if Congress doesn’t raise the U.S. debt ceiling by an August deadline.
The 17 Republicans, including Jim DeMint of South Carolina and Pat Toomey of Pennsylvania, accused Geithner of ignoring some methods he could use to forestall a default of government obligations to bondholders, including cutting federal programs.
“We believe it is irresponsible and harmful for you to sow the seeds of doubt in the market regarding the full faith and credit of the United States and ask that you set the record straight -- that you will use all available Treasury funds necessary to prevent default while Congress addresses the looming debt crisis,” the senators wrote in a letter dated May 23 and released by DeMint today.
Geithner told Congress in a May 2 letter that lawmakers need to act by Aug. 2, almost a month later than he previously estimated. Delaying action “risks a loss of confidence” and a U.S. default would have a “catastrophic economic effect,” he wrote.
Republicans in both chambers are demanding large spending cuts in exchange for an increase in the debt limit. Vice President Joe Biden is leading bipartisan talks with six lawmakers geared toward drafting an accord. The group is meeting in the Capitol today.
Some of the Republicans who signed the letter to Geithner have previously said he is trying to stampede Congress into approving the boost by warning of a crisis they reject as exaggerated.
In the letter, they referred to the debt-ceiling deadline as a “budget enforcement mechanism.”
It’s time to “address the looming fiscal crisis, cut spending, reform entitlements, implement spending caps, and pass a balanced budget constitutional amendment before considering any increase in the federal debt ceiling,” they wrote. “These are the contours of the debate before the American people this spring and summer.”
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