(MENAFN- IANS)
Washington, Sep 23 (IANS) Former Secretaries of the US Treasury Department have urged congress to swiftly raise the federal debt limit, warning "an unprecedented default" would cause serious economic and national security harm.
"We write to express our deep sense of urgency that Congressional leadership, working with the Administration and the President, move swiftly to initiate and complete a viable legislative process necessary to raise the debt limit," the former Secretaries, including Henry M. Paulson, Jr. and Lawrence H. Summers, wrote in a letter to Congressional leaders on Wednesday.
"Failing to address the debt limit, and allowing an unprecedented default, could cause serious economic and national security harm."
It added that even a short-lived default could threaten economic growth, reports Xinhua news agency.
"It creates the risk of roiling markets, and of sapping economic confidence, and it would prevent Americans from receiving vital services. It would be very damaging to undermine trust in the full faith and credit of the US, and this damage would be hard to repair," the former Secretaries warned.
The letter came after the House of Representatives on Tuesday night passed a bill that would prevent a federal government shutdown and suspend the debt limit on government borrowing into December 2022.
The bill now heads to the Senate, where the Senate Republicans have vowed to block it.
Last month, 46 Republican Senators signed a letter pledging not to help Democrats raise the debt ceiling, raising the risk of US defaulting on its obligations in the fall.
Incumbent Treasury Secretary Janet Yellen on Sunday warned that US economic recovery would reverse into recession if the Congress fails to swiftly raise the debt limit.
The debt limit, commonly called the debt ceiling, is the total amount of money that the government is authorised to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.
As part of a bipartisan budget deal enacted in August 2019, the Congress suspended the debt limit through July 31.
After the debt limit was reinstated on August 1, the Treasury Department began using "extraordinary measures" to continue to finance the government on a temporary basis.
--IANS
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