Republican lawmakers are stepping up pressure on the Obama administration to craft a Plan B just in case budget talks fall through and the debt ceiling remains frozen past the Aug. 2 deadline Treasury Secretary Tim Geithner has set.
The Obama administration argues that Washington essentially has no other choice than to raise the $14.3 trillion cap. With that limit technically having been reached, Geithner is tapping into federal retirement funds and using other fiscal tricks to keep U.S. finances stable, but officials warn the red ink is so deep that within weeks Congress will have to either lift the cap or risk default.
But on the sidelines of budget talks between White House officials and bipartisan lawmakers, GOP senators are calling on the administration to start preparing for an impasse, “just in case.” The calls come after Congress just voted down budgets from President Obama and GOP Rep. Paul Ryan. While Geithner warns of fiscal Armageddon should Congress fail to act on the debt cap, the lawmakers claim there are still steps the administration could take to ensure the U.S. government meets its obligations.