WASHINGTON -- Congress has one month to raise the nation's borrowing limit or the government will default on its debt, the Treasury Department said Friday.
Treasury officials confirmed the Aug. 2 deadline in a monthly update that assesses the nation's borrowing situation. The United States reached the $14.3 trillion limit in May. Higher revenue and accounting maneuvers have allowed the government to keep paying its bills in the interim.
Treasury Secretary Timothy Geithner urged Congress to raise the limit and "avoid the catastrophic economic and market consequences of a default crisis."
President Barack Obama and Congressional Republicans are engaged in tough negotiations over resolving the issue. Republicans are demanding deep spending cuts as a condition of increasing the limit. But Republicans will not support tax increases, which Democrats say must be part of any deal.