U.S. Treasury Department Says It Sees No Alternative to Raising Debt Limit

The U.S. must raise its debt limit, the Treasury Department said after Reuters reported that officials are discussing legal options to stave off default if Congress fails to amend the ceiling by the Aug. 2 deadline.

“As we have said repeatedly over the past six months, there is no alternative to raising the debt limit,” Colleen Murray, a Treasury spokeswoman, said when contacted late yesterday in the U.S. “The only way to prevent a default crisis and protect America’s creditworthiness is to enact a timely debt limit increase, which we remain confident Congress will do.”

A team of Treasury Department officials is studying whether the government has legal authority to prioritize its debt payments, CNBC said, citing a report by Reuters that attributed the information to people familiar with the matter.

Murray didn’t address whether officials are making contingency plans.

To contact the reporter on this story: Cheyenne Hopkins in Washington at chopkins19@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net