– Washington hit the debt ceiling today, barring the Treasury Department from borrowing from the public, so it will begin borrowing from federal workers’ pensions to keep the government afloat. Treasury is legally bound to reimburse the pensions, so retirees won't be affected, notes the Washington Post, but if the debt ceiling isn’t raised by Aug. 2, secretary Timothy Geithner warned again today that the US will hit default. Republicans, however, aren't buying Dems' dire predictions, and the Wall Street Journal notes that a deal is likely far off, though both sides appear to want to avoid coming down to the wire. “There will be no debt-limit increase without serious budget reforms and significant spending cuts that are greater than any increase in the debt limit,” John Boehner said today, Politico reports. Consensus on where cuts might focus remains vague, but federal pension reform is said to be among items on the chopping block. Since 1985, the government has borrowed from special programs six times to prevent default—but this time, it needs much more money.

Expand this summary.
The United States government hit its $14 trillion borrowing limit Monday, forcing the Treasury Department to begin taking a series of extreme steps to stave off default, including suspending payments into public employee pension plans. 
  
 Treasury Secretary Timothy Geithner sent letters to congressional leaders Monday to explain that his money shuffle will buy them until August 2 to reach a deal on the debt limit. After that, the government will default on its debts. 
  
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 “I have written to Congress on previous occasions regarding the importance of timely action to increase the debt limit in order to protect the full faith and credit of the United States and avoid catastrophic economic consequences for citizens,” Geithner wrote Monday. “I again urge Congress to act to increase the statutory debt limit as soon as possible.” 
  
 Earlier this month, Geithner extended the drop-dead default date from July 8 to August 2. 
  
 Monday, the Treasury secretary said his predecessors had used the same maneuvers of temporarily stopping payment into the Civil Service Retirement and Disability Fund and Government Securities Investment Fund. 
  
 Geithner noted that both funds “will be made whole once the debt limit is increased” and that “federal retirees and employees will be unaffected by these actions” when Congress legislates to increase the nation’s borrowing capacity. 
  
 According to a POLITICO-George Washington University Battleground Poll, 56 percent of voters think it will be ‘disastrous’ to the U.S. economy if Congress does NOT vote to increase the debt limit. 
  
 As serious as the debt limit is, politicians on the Hill are girding up for a broader debate on the debt, with multiple groups negotiating how to slash trillions in spending. 
  
 Democratic House leaders were in New York Monday speaking with financial executives and laying out their vision for deficit reduction. Speaker John Boehner delivered an address to Wall Street leaders last Monday. 
  
 Meanwhile, back in Washington, the staffs of lawmakers sitting on a bipartisan, bicameral panel with Vice President Joe Biden charged with coming up with long-term deficit solutions are slated to be working all week, even as House members are on recess. 
  
 But it won’t be easy. 
  
 Senate Minority Leader Mitch McConnell (R-Ky.) last week drew one of the strongest lines in the sand yet saying he would not be able to vote for an increase in the debt ceiling without “serious” reforms to entitlements like Medicaid and Medicare. And Democrats insist that any long-term plan has to include a discussion on raising tax revenue— a position that Republicans have said is untenable. 
  
 Boehner responded to Geithner’s most recent letter Monday afternoon, using it as yet another opportunity to issue a rallying cry on reducing spending. 
  
 “There will be no debt limit increase without serious budget reforms and significant spending cuts – cuts that are greater than any increase in the debt limit,” Boehner said in a statement. 
  
 Senate Majority Leader Harry Reid (D-Nev.) said Congress needs to act swiftly. 
  
 “We can’t afford to play these political games and trigger a default crisis that would lead to catastrophe. We can’t afford to make unrealistic demands or hold hostage policies that affect real people,” Reid said on the Senate floor. “The emergency we enter today isn’t about a penny of new spending. It’s not about new programs or new taxes. It’s not about creating new obligations, only meeting existing ones. The debt limit is about paying what we already owe.” 
  
 Boehner, Nancy Pelosi, Reid, Minority Leader Mitch McConnell (R-Ky.) and the top lawmakers on the House Ways and Means Committee and Senate Finance Committee also received Geithner’s letter. ||||| The Obama administration will begin to tap federal retiree programs to help fund operations after the government lost its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt. 
  
 Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With that limit reached Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills. 
  
 Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers. The measure won’t have an impact on retirees because the Treasury is legally required to reimburse the program. 
  
 The maneuver buys Geithner only a few months of time. If Congress does not vote by Aug. 2 to raise the debt limit, Geithner says the government is likely to default on some of its obligations, which he says would cause enormous economic harm and the suspension of government services, including the disbursal of Social Security funds. 
  
 Many congressional Republicans, however, have been skeptical that breaching the Aug. 2 deadline would be as catastrophic as Geithner suggests. What’s more, Republican leaders are insisting that Congress cut spending by as much as the Obama administration wants to raise the debt limit, without any new taxes. Obama is proposing spending cuts and tax increases to rein in the debt. 
  
 “Everything should be on the table, except raising taxes,” House Speaker John Boehner (R-Ohio) said on CBS’s “Face the Nation.” “Because raising taxes will hurt our economy and hurt our ability to create jobs in our country.” 
  
 The Obama administration has warned that it is dangerous to make a vote on raising the debt limit contingent on other proposals. But Boehner is demanding that Congress use the debt vote as a way to bring down government spending. 
  
 “I’m ready to cut the deal today,” Boehner said. “We don’t have to wait until the 11th hour. But I am not going to walk away from this moment. We have a moment, a window of opportunity to act, because if we don’t act, the markets are going to act for us.” 
  
 Geithner’s plan to tap federal retiree programs as a temporary means to avoid a government default comes as the Obama administration has shown growing interest in altering those programs to curb the debt in the long run. 
  
 Administration officials have expressed interest in raising the amount that federal employees contribute to their pensions, sources told The Washington Post. 
  
 The Republicans have suggested that the civilian workforce contribute more to its retirement in the future, effectively trimming 5 percent from salaries. The administration has not been willing to go that far in talks being led by Vice President Biden. 
  
 Treasury secretaries have tapped special programs to avoid default six times since 1985. The most protracted delay in raising the debt limit came in 1995 after congressional Republicans swept to power during the Clinton administration. 
  
 But today, the government needs far more money to cover its obligations than in the past, making the special measures less effective than they used to be. The government needs about $125 billion more a month than it takes in each month. 
  
 In a letter released last week to Sen. Michael Bennet (D-Colo.), Geithner wrote that a default would risk a “double-dip” recession. 
  
 “Default would not only increase borrowing costs for the federal government, but also for families, businesses and local governments — reducing investment and job creation throughout the economy,” Geithner wrote. 
  
 But several prominent congressional Republicans have dismissed the Obama administration’s assertion that the country would face dire consequences if Congress does not vote to raise the federal limit on government borrowing by August. Many of the skeptics are affiliated with the tea party. 
  
 In the Senate, freshman Sen. Pat Toomey (R-Pa.) has said the Obama administration has been exaggerating the effects of hitting the default mark. He says breaching the limit would cause only a partial government shutdown. 
  
 Other freshman Republicans have said that Geithner could raise money to avoid defaulting by selling investments in private companies. The Republican Study Committee, which represents more than 150 lawmakers, sent a letter to Geithner last week pressing for more details about the Aug. 2 deadline. 
  
 More from The Washington Post: 
  
 READ: 2chambers: GOP, tea party less likely to see potential default as ‘disastrous’ 
  
 READ: Wonkbook: Happy debt-ceiling day! 
  
 READ: Boehner: It’s clear U.S. must raise debt limit 
  
 READ: A tale of many, many, many caps 
  
 READ: Debt ceiling, deficit solution: Epic federal yard sale? 
  
 SEE PHOTOS: Key players in debate over U.S. fiscal policy 
  
 CHART: A look at national debt and debt ceiling over past 30 years 
  
 READ: More news from Post Business ||||| WSJ's Paul Vigna reports the nation's nearly $14.3 trillion debt ceiling will be breached today. Also, NASDAQ withdrew its bid for the NYSE. (AP Photo/Henny Ray Abrams, file) 
  
 The U.S. government is expected to hit the $14.294 trillion debt ceiling Monday, setting in motion an uncertain, 11-week political scramble to avoid a default. 
  
 The Treasury Department said Monday it will stop issuing and reinvesting government securities in certain government pension plans, part of a series of steps designed to delay a default until Aug. 2. 
  
 The Treasury's moves buy time for the White House and congressional leaders to reach a deficit-reduction agreement that could clear the way for enough lawmakers to vote to raise the amount of money Congress allows the nation to borrow. 
  
 Gene Sperling, director of the National Economic Council, said reaching the debt ceiling "should be a warning bell to the political system that it's time to get serious about preserving our full faith and credit." The Obama administration says a default would tip the U.S. back into a financial crisis. 
  
 But the pathway to a deal remains unclear, even to those doing the negotiating. The White House and Republicans are giving conflicting signals about how close they are to a deal. Vice President Joe Biden said last week the contours of an agreement were taking shape. House Speaker John Boehner painted a different picture Sunday, saying on CBS's Face the Nation "I'm not seeing any real action." 
  
 Many Republicans and some Democrats have said they won't vote to increase the debt ceiling without an accompanying deal to cut spending or tackle such longer-term fiscal problems as health-care costs. They argue the debt ceiling is a good venue to force changes needed to help secure the nation's solvency. 
  
 People familiar with the negotiations led by Mr. Biden say they are looking at cuts to agriculture subsidies and federal retirement programs, stepped-up antifraud efforts, increased premiums for pension plans backed by the Pension Benefit Guaranty Corporation and the sale of wireless spectrum and government properties. 
  
 The talks are at an early stage and potential areas of agreement are preliminary, officials warn. But Democrats have not ruled out some thorny issues, according to people familiar with the negotiations, including reforms to the pension program for federal workers. 
  
 The areas being examined amount to a sliver of the $4 trillion goal officials have set for deficit reduction over the next 10 years. 
  
 And taxes remain a roadblock. Republican leaders say tax increases can't be part of any deficit plan, but White House officials have said any plan must include revenue increases. 
  
 Mr. Sperling said the White House wants an agreement "weeks in advance as opposed to being in stalemate in late July where everything is coming down to the wire." Mr. Boehner appeared to agree, saying Sunday a deal doesn't "have to wait until the eleventh hour." 
  
 A group of House Republicans has questioned the validity of the August deadline, suggesting the Treasury could sell assets, such as gold reserves, to keep paying creditors. Treasury officials have rejected the idea, but could be forced to rethink if talks stall. 
  
 The U.S. government has hit the debt ceiling before, most notably in 1995 and 1996 when the Clinton administration and House Republicans squared off over government spending. Eventually, though, lawmakers reached deals and the country hasn't defaulted on its debt in modern history. 
  
 Bankers and business executives warned lawmakers last week that default could trigger a financial crisis, sending interest rates soaring, which would make it harder for families and businesses to borrow. That's because a default would throw into question the value of U.S. Treasury securities, long considered one of the world's safest investments. Many loans and business deals are based on the value of Treasurys, and if their value eroded the impact would be felt broadly. 
  
 Because the government is projected to run a $1.5 trillion deficit this year, it must borrow money to cover its obligations, ranging from military spending to interest on existing debt. 
  
 Lawmakers have not felt pressure to act yet in part because markets have remained stable, and the yield for U.S. government debt remains low. 
  
 Juggling the Books Treasury has several steps it can take to avoid exceeding the debt ceiling Enlarge Image Close 
  
 Yields on 10-year Treasury notes have fallen from more than 3.7% in early February—when Fed officials and others began warning of catastrophic consequences if the debt limit was breached—to below 3.2%. 
  
 If investors had serious concerns about a default, they likely would be selling bonds, which would in turn push up their yields. Bond yields have instead been moving down in part because the economy seems to be slowing. Commodities prices also have tumbled, which holds down inflation and puts downward pressure on bond yields. 
  
 If officials get too close to Aug. 2, government officials might have to decide which of the country's creditors to pay and which payments they will suspend or stop. 
  
 Treasury officials so far have deflected questions about which creditors would be given priority. Treasury Secretary Timothy Geithner said in a letter to Sen. Michael Bennet (D., Colo.) last week that failing to raise the debt ceiling would lead to a default on obligations "such as payments to our service members, citizens, investors, and businesses." 
  
 —Jon Hilsenrath and Naftali Bendavid contributed to this article. 
  
 Write to Damian Paletta at damian.paletta@wsj.com |||||
– Washington nådde skuldtaket i dag, vilket hindrar finansdepartementet från att låna från allmänheten, så det kommer att börja låna från federala arbetares pensioner för att hålla regeringen flytande. Statskassan är juridiskt bunden att återbetala pensionerna, så pensionärerna kommer inte att påverkas, noterar Washington Post, men om skuldtaket inte höjs av Aug. 2, sekreterare Timothy Geithner varnade igen idag att USA kommer att slå fallissemang. Republikanerna köper dock inte Dems ödesdigra förutsägelser, och Wall Street Journal konstaterar att en affär sannolikt är långt borta, även om båda sidor verkar vilja undvika att komma ner till tråden. “Det kommer inte att bli någon skuldgräns ökning utan allvarliga budgetreformer och betydande utgiftsnedskärningar som är större än någon ökning av skuldgränsen,” John Boehner sade idag, Politico rapporterar. Konsensus om var nedskärningarna kan vara inriktade är fortfarande vagt, men den federala pensionsreformen sägs vara en av punkterna på huggblocket. Sedan 1985 har regeringen lånat från specialprogram sex gånger för att förhindra förfall – men den här gången behöver den mycket mer pengar. Utöka denna sammanfattning.
“ Washington reached the debt ceiling today, preventing the Treasury from borrowing from the public, so it will start borrowing from federal workers’ pensions to keep the government afloat. The Treasury is legally bound to repay the pensions, so pensioners will not be affected, notes the Washington Post, but if the debt ceiling is not raised by Aug. 2, Secretary Timothy Geithner warned again today that the United States will hit default. However, the Republicans do not buy Dem's fatal predictions, and the Wall Street Journal notes that a deal is likely far away, although both sides seem to want to avoid coming down to the thread. “There will be no debt limit increase without serious budgetary reforms and significant spending cuts greater than any increase in the debt limit,” John Boehner said today, Politico reports. Consensus as to where the cuts may be targeted is still vague, but the federal pension reform is said to be one of the points on the chopping block. Since 1985, the government has borrowed from special programs six times to prevent decay – but this time it needs much more money. Extend this summary.
USA: s regering nådde sin $ 14 biljoner lån gräns måndag, tvingar finansdepartementet att börja vidta en rad extrema åtgärder för att hålla av fallissemang, inklusive att avbryta betalningar i offentliga anställda pensionsplaner. Finansministern Timothy Geithner skickade brev till kongressledarna på måndag för att förklara att hans pengaväxling kommer att köpa dem till den 2 augusti för att nå en uppgörelse om skuldgränsen. Efter det kommer regeringen att förfalla på sina skulder. Text Size - + återställning POLITICO 44 “Jag har skrivit till kongressen vid tidigare tillfällen om vikten av snabba åtgärder för att öka skuldgränsen för att skydda full tro och kredit i USA och undvika katastrofala ekonomiska konsekvenser för medborgarna,” Geithner skrev måndag. “Jag uppmanar återigen kongressen att agera för att öka den lagstadgade skuldgränsen så snart som möjligt.” Tidigare denna månad, förlängde Geithner drop-dead default datum från 8 juli till 2 augusti. Måndagen sade finansministern att hans föregångare hade använt samma manövrer för att tillfälligt stoppa betalningen till Statsförvaltningens pensions- och handikappfond och Statens värdepappersfond. Geithner konstaterade att båda fonderna "kommer att bli hela när skuldgränsen har höjts" och att "federala pensionärer och anställda kommer att påverkas av dessa handlingar" när kongressen lagstiftar för att öka nationens lånekapacitet. Enligt en POLITICO-George Washington University Battleground Poll, 56 procent av väljarna tror att det kommer att bli “olyckligt” för den amerikanska ekonomin om kongressen inte röstar för att öka skuldgränsen. Hur allvarlig skuldgränsen än är, är politikerna på kullen redo för en bredare debatt om skulden, där flera grupper förhandlar om hur man ska skära ned biljoner i utgifterna. Democratic House ledare var i New York måndagen talar med finanschefer och lägger fram sin vision för minskning av underskottet. Talare John Boehner levererade ett tal till Wall Streets ledare förra måndagen. Samtidigt, tillbaka i Washington, de anställda av lagstiftare som sitter på en bipartisan, tvåkammarpanel med vicepresident Joe Biden som är anklagad för att komma med långsiktiga underskottslösningar förväntas arbeta hela veckan, även som House medlemmar är på paus. Men det kommer inte att bli lätt. Senaten Minority Leader Mitch McConnell (R-Ky.) förra veckan drog en av de starkaste linjerna i sanden men säger att han inte skulle kunna rösta för en ökning av skuldtaket utan "allvarliga" reformer av rättigheter som Medicaid och Medicare. Och demokraterna insisterar på att alla långsiktiga planer måste innehålla en diskussion om att öka skatteintäkterna – en ståndpunkt som republikanerna har sagt är ohållbar. Boehner svarade på Geithners senaste brev måndag eftermiddag, och använde det som ännu ett tillfälle att utfärda ett rallyrop om att minska utgifterna. “Det kommer inte att finnas någon skuld gräns ökning utan allvarliga budgetreformer och betydande utgiftsnedskärningar – nedskärningar som är större än någon ökning av skuldgränsen,” Boehner sade i ett uttalande. Senatens majoritetsledare Harry Reid (D-Nev.) sade att kongressen måste agera snabbt. "Vi har inte råd att spela dessa politiska spel och utlösa en standardkris som skulle leda till katastrof. Vi har inte råd att ställa orealistiska krav eller hålla gisslan politik som påverkar verkliga människor," Reid sade på senatens golv. — Nödläget vi träder in i dag handlar inte om ett öre nya utgifter. Det handlar inte om nya program eller nya skatter. Det handlar inte om att skapa nya skyldigheter, bara att uppfylla befintliga. Skuldgränsen handlar om att betala vad vi redan är skyldiga.” Boehner, Nancy Pelosi, Reid, Minority Leader Mitch McConnell (R-Ky.) och de bästa lagstiftarna på House Ways and Means Committee och senatens finansutskott fick också Geithners brev. Obama-administrationen kommer att börja använda federala pensionärsprogram för att hjälpa till att finansiera verksamheten efter att regeringen förlorat sin förmåga måndag att låna mer pengar från allmänheten, vilket bidrar till att påskynda ansträngningarna i Washington för att utforma en kompromiss över skulden. Statsministern Timothy F. Geithner har i månader varnat för att regeringen snart skulle komma upp i taket på 14,3 biljoner dollar — en rättslig gräns för hur mycket den kan låna. Med den gränsen nått måndag, Geithner vidtar särskilda åtgärder i ett försök att skjuta upp den dag då han inte längre kommer att ha tillräckligt med medel för att betala alla regeringens räkningar. Geithner, som redan har stängt av ett program som hjälper staten och lokala myndigheter att hantera sin ekonomi, kommer att börja låna från pensionsfonder för federala arbetare. Åtgärden kommer inte att ha någon inverkan på pensionärer eftersom statskassan är lagligt skyldig att återbetala programmet. Manövern köper Geithner bara några månader. Om kongressen inte röstar 2 augusti för att höja skuldgränsen, säger Geithner att regeringen sannolikt kommer att försumma vissa av sina skyldigheter, vilket han säger skulle orsaka enorm ekonomisk skada och upphävande av statliga tjänster, inklusive utbetalning av socialförsäkringsfonder. Många kongressrepublikaner har dock varit skeptiska till att det skulle vara så katastrofalt att bryta mot tidsfristen 2 augusti som Geithner föreslår. Vad mer, Republikanska ledare insisterar på att kongressen skära utgifterna med så mycket som Obama administrationen vill höja skuldgränsen, utan några nya skatter. Obama föreslår utgiftssänkningar och skattehöjningar för att tygla skulden. “Allt bör vara på bordet, utom höja skatter,” House Speaker John Boehner (R-Ohio) sade på CBS: s “Face the Nation.” “Eftersom höja skatter kommer att skada vår ekonomi och skada vår förmåga att skapa jobb i vårt land.” Obama administrationen har varnat för att det är farligt att göra en omröstning om att höja skuldgränsen beroende på andra förslag. Men Boehner kräver att kongressen använder skuldomröstningen som ett sätt att få ner statens utgifter. — Jag är redo att sluta affären i dag, sade Boehner. — Vi behöver inte vänta till den 11:e timmen. Men jag tänker inte lämna det här ögonblicket. Vi har ett ögonblick, ett fönster av möjlighet att agera, eftersom om vi inte agerar, marknaderna kommer att agera för oss. "Geithners plan att tapa federala pensionärsprogram som ett tillfälligt sätt att undvika en statlig försummelse kommer som Obama administrationen har visat växande intresse för att ändra dessa program för att stävja skulden i det långa loppet. Administrationstjänstemän har uttryckt intresse för att höja det belopp som federala anställda bidrar till sina pensioner, sade källor till The Washington Post. Republikanerna har föreslagit att den civila arbetskraften bidrar mer till dess pensionering i framtiden, effektivt trimma 5 procent av lönerna. Administrationen har inte varit villig att gå så långt i samtal som leds av vicepresident Biden. Finansdepartementets sekreterare har använt särskilda program för att undvika försumlighet sex gånger sedan 1985. Den mest utdragna förseningen i höjningen av skuldgränsen kom 1995 efter att kongressrepublikanerna svept till makten under Clintonadministrationen. Men i dag behöver regeringen mycket mer pengar för att täcka sina skyldigheter än tidigare, vilket gör de särskilda åtgärderna mindre effektiva än de brukade vara. Regeringen behöver omkring 125 miljarder dollar mer i månaden än den tar in varje månad. I ett brev som släpptes förra veckan till Sen. Michael Bennet (D-Colo.), Geithner skrev att en standard skulle riskera en “dubbel-dip” lågkonjunktur. “Default skulle inte bara öka lånekostnaderna för den federala regeringen, men också för familjer, företag och lokala myndigheter — minska investeringar och skapa arbetstillfällen i hela ekonomin,” Geithner skrev. Men flera framstående kongressrepublikaner har avfärdat Obama-administrationens påstående att landet skulle få ödesdigra konsekvenser om kongressen inte röstar för att höja den federala gränsen för regeringens upplåning till augusti. Många av skeptikerna är anslutna till tebjudningen. I senaten, förstaårselev Sen. Pat Toomey (R-Pa.) har sagt Obama administrationen har överdrivit effekterna av att slå standardmärket. Att bryta gränsen skulle bara orsaka en delvis statlig avstängning. Andra förstaårsrepublikaner har sagt att Geithner skulle kunna samla in pengar för att undvika försumlighet genom att sälja investeringar i privata företag. Republikanska studiekommittén, som företräder mer än 150 lagstiftare, skickade ett brev till Geithner förra veckan med krav på mer information om tidsfristen 2 augusti. Mer från The Washington Post: LÄS: 2 kammare: GOP, te part mindre sannolikt att se potentiella standard som “katastrof” LÄS: Wonkbook: Glad skuldtak dag! LÄS: Boehner: Det är klart att USA måste höja skuldgränsen LÄS: En berättelse om många, många, många mössor LÄS: Skuldtak, underskott lösning: Epic federala varv försäljning? SEE PHOTOS: Viktiga aktörer i debatten över USA:s finanspolitik CHART: En titt på statsskuld och skuldtak under de senaste 30 åren LÄS: Fler nyheter från Post Business .. WSJ: s Paul Vigna rapporterar nationens nästan $ 14,3 biljoner skuldtaket kommer att brytas idag. NASDAQ drog också tillbaka sitt bud på NYSE. (AP Photo/Henny Ray Abrams, fil) USA:s regering förväntas träffa skuldtaket på 14,294 biljoner dollar måndag, sätta i gång en osäker, 11-veckors politisk scramble för att undvika en standard. Finansdepartementet sade måndag att det kommer att sluta emittera och återinvestera statliga värdepapper i vissa statliga pensionsplaner, en del av en rad åtgärder som syftar till att fördröja en fallissemang till 2 augusti. Finansdepartementets drag köper tid för Vita huset och kongressledarna att nå ett underskottsminskningsavtal som skulle kunna bana väg för tillräckligt många lagstiftare att rösta för att höja mängden pengar Kongressen tillåter nationen att låna. Gene Sperling, chef för National Economic Council, sade att nå skuldtaket "bör vara en varning klocka till det politiska systemet att det är dags att få allvarligt på att bevara vår fulla tro och kredit." Obama-administrationen säger att en förfallen händelse skulle ge USA en dricks tillbaka in i en finansiell kris. Men vägen till ett avtal är fortfarande oklar, även för dem som förhandlar. Vita huset och republikanerna ger motstridiga signaler om hur nära ett avtal de är. Vicepresident Joe Biden sa att konturerna av ett avtal höll på att ta form. House Speaker John Boehner målade en annan bild söndag, säger på CBS's Face the Nation "I'm not see any real action." Många republikaner och några demokrater har sagt att de inte kommer att rösta för att höja skuldtaket utan en tillhörande affär för att minska utgifterna eller ta itu med sådana mer långsiktiga finanspolitiska problem som sjukvårdskostnader. De hävdar att skuldtaket är en bra plats för att tvinga fram förändringar som behövs för att säkra nationens solvens. Människor som känner till förhandlingarna som leds av Mr Biden säger att de tittar på nedskärningar av jordbrukssubventioner och federala pensionsprogram, intensifierade bedrägeribekämpningsinsatser, ökade premier för pensionsplaner som backas upp av Pension Benefit Guaranty Corporation och försäljning av trådlöst spektrum och statliga fastigheter. Samtalen är på ett tidigt stadium och potentiella avtalsområden är preliminära, varnande tjänstemän. Men demokraterna har inte uteslutit några taggiga frågor, enligt personer som känner till förhandlingarna, bland annat reformer av pensionsprogrammet för federala arbetare. De områden som undersöks uppgår till en sliver av de 4 biljoner dollar mål tjänstemän har satt för minskning av underskottet under de kommande 10 åren. Och skatterna förblir en vägspärr. Republikanska ledare säger att skattehöjningar inte kan vara en del av någon underskottsplan, men Vita husets tjänstemän har sagt att alla planer måste inkludera intäktsökningar. Mr Sperling sa att Vita huset vill ha en överenskommelse "veckor i förväg i stället för att vara i dödläge i slutet av juli där allt kommer ner till tråden." Mr Boehner tycktes hålla med, sägande söndag en deal inte "måste vänta tills elfte timmen." En grupp husrepublikaner har ifrågasatt giltigheten av augusti-deadlineen, vilket tyder på att statskassan skulle kunna sälja tillgångar, till exempel guldreserver, för att fortsätta betala borgenärer. Finansdepartementets tjänstemän har avvisat idén, men skulle kunna tvingas att tänka om om samtalen stannar. USA:s regering har nått skuldtaket tidigare, framför allt 1995 och 1996 när Clintonadministrationen och House Republicans kvitterade över statsutgifterna. Till slut nådde dock lagstiftare överenskommelser och landet har inte försummat sin skuld i modern historia. Bankirer och företagsledare varnade lagstiftarna förra veckan för att fallissemang skulle kunna utlösa en finansiell kris, vilket skulle leda till att räntorna sköt i höjden, vilket skulle göra det svårare för familjer och företag att låna. Det beror på att ett fallissemang skulle ifrågasätta värdet av amerikanska statspapper, länge ansett som en av världens säkraste investeringar. Många lån och affärsuppgörelser bygger på värdet av statskassan, och om deras värde urholkades skulle effekten kännas allmänt. Eftersom regeringen beräknas ha ett underskott på 1,5 biljoner dollar i år, måste den låna pengar för att täcka sina skyldigheter, allt från militära utgifter till räntor på befintliga skulder. Lagstiftare har inte känt sig pressade att agera ännu delvis eftersom marknaderna har förblivit stabila, och avkastningen på den amerikanska statsskulden är fortfarande låg. Juggling the Books Treasury har flera steg som kan vidtas för att undvika att överskrida skuldtaket Förstora Bild Stäng Avkastningar på 10-åriga Statskassan sedlar har sjunkit från mer än 3,7% i början av februari-när Fed tjänstemän och andra började varna för katastrofala konsekvenser om skuldgränsen överskreds-till under 3,2%. Om investerarna hade allvarliga farhågor om ett fallissemang skulle de sannolikt sälja obligationer, vilket i sin tur skulle öka deras avkastning. Obligationsavkastningen har i stället delvis gått ner eftersom ekonomin verkar sakta farten. Priserna på råvaror har också fallit, vilket håller nere inflationen och pressar obligationsavkastningen nedåt. Om tjänstemännen kommer för nära 2 augusti, kan regeringstjänstemännen behöva bestämma vilka av landets fordringsägare som ska betala och vilka betalningar de ska ställa in eller stoppa. Statstjänstemän har hittills avvikit från frågor om vilka borgenärer som skulle prioriteras. Finansminister Timothy Geithner sade i ett brev till Sen. Michael Bennet (D., Colo.) förra veckan att underlåtenhet att höja skuldtaket skulle leda till en försumlighet på skyldigheter "såsom betalningar till våra servicemedlemmar, medborgare, investerare och företag." —Jon Hilsenrath och Naftali Bendavid bidrog till denna artikel. Skriv till Damian Paletta at damian.paletta@wsj.com ..................................
The U.S. government reached its $14 trillion loan limit Monday, forcing the Treasury to begin taking a series of extreme measures to hold off default, including suspending payments in public employee retirement plans. Finance Minister Timothy Geithner sent letters to the congressional leaders on Monday to declare that his money exchange will buy them by August 2 to reach a settlement on the debt line. After that, the government will default on its debts. Text Size - + restoration POLITICO 44 “I’ve written to Congress on previous occasions about the importance of rapid action to increase the debt limit to protect full faith and credit in the United States and avoid disastrous economic consequences for citizens,” Geithner wrote Monday. “I again urge Congress to act to increase the statutory debt limit as soon as possible.” Earlier this month, Geithner extended drop-dead default date from July 8 to August 2. On Monday, the Minister of Finance said that his predecessor had used the same maneuvers to temporarily halt payment to the State Administration Pension and Disability Fund and the State Securities Fund. Geithner noted that both funds "will be whole once the debt limit has been raised" and that "federal pensioners and employees will be affected by these actions" when Congress legislates to increase the nation's loan capacity. According to a POLITICO-George Washington University Battleground Poll, 56 percent of voters believe that it will be “unfortunate” for the U.S. economy if Congress does not vote to increase the debt limit. As serious as the debt line is, politicians on the hill are ready for a wider debate on debt, with several groups negotiating how to cut trillions of expenditure. Democratic House leaders were in New York City Monday talking to financial managers and presenting their vision for deficit reduction. Speaker John Boehner delivered a speech to Wall Street leaders last Monday. At the same time, back in Washington, the employees of legislators sitting on a bipartisan, bichamber panel with Vice President Joe Biden who is accused of coming up with long-term deficit solutions are expected to work all week, even as House members are on break. But it won't be easy. Senate Minority Leader Mitch McConnell (R-Ky.) last week drew one of the strongest lines in the sand but says he would not be able to vote for an increase in the debt ceiling without "serious" reforms of rights such as Medicaid and Medicare. And the Democrats insist that any long-term plans must include a discussion about increasing tax revenues – a position that Republicans have said is unsustainable. Boehner responded to Geithner's last letter Monday afternoon, using it as another opportunity to issue a rally call to reduce spending. “There will be no debt limit increase without serious budget reforms and significant spending cuts – cuts greater than any increase in the debt limit,” Boehner said in a statement. Senate majority leader Harry Reid (D-Nev.) said Congress must act quickly. "We cannot afford to play these political games and trigger a standard crisis that would lead to disaster. We can't afford to make unrealistic demands or hold hostage policies that affect real people," Reid said on the Senate floor. “The emergency we are entering today is not about a penny of new expenditure. It is not about new programmes or new taxes. It is not about creating new obligations, just fulfilling existing ones. The debt limit is about paying what we already owe.” Boehner, Nancy Pelosi, Reid, Minority Leader Mitch McConnell (R-Ky.) and the best legislators on the House Ways and Means Committee and the Senate Finance Committee also received Geithner’s letter. The Obama administration will begin using federal retirement programs to help finance the business after the government loses its ability Monday to borrow more money from the public, helping speed up efforts in Washington to design a compromise over debt. Prime Minister Timothy F. Geithner has for months warned that the government would soon come up to the ceiling of $14.3 trillion — a legal limit on how much it can borrow. With that limit reached Monday, Geithner takes special action in an attempt to postpone the day when he will no longer have enough funds to pay all government bills. Geithner, who has already shut down a program that helps the state and local authorities manage their finances, will start borrowing from pension funds for federal workers. The measure will have no impact on pensioners as the Treasury is legally obliged to repay the programme. The maneuver buys Geithner only a few months. If Congress does not vote August 2 to raise the debt limit, Geithner says that the government is likely to neglect some of its obligations, which he says would cause enormous financial damage and cancellation of government services, including the payment of social security funds. However, many congressional Republicans have been skeptical that it would be so disastrous to violate the August 2 deadline as Geithner proposes. What's more, Republican leaders insist that Congress cut spending by as much as the Obama administration wants to raise the debt line, without any new taxes. Obama proposes spending cuts and tax increases to curb debt. “Everything should be on the table, except raise taxes,” House Speaker John Boehner (R-Ohio) said on CBS’s “Face the Nation.” “Because raising taxes will damage our economy and damage our ability to create jobs in our country.” The Obama administration has warned that it is dangerous to make a vote to raise the debt limit depending on other suggestions. But Boehner demands Congress use the debt vote as a means of bringing down government spending. “I’m ready to close the deal today,” Boehner said. “We don’t have to wait until the 11th hour. But I'm not leaving this moment. We have a moment, a window of opportunity to act, because if we don't act, the markets will act for us. "Geithner's plan to tap federal retirement programs as a temporary way to avoid a state neglect comes as the Obama administration has shown growing interest in changing these programs to curb debt in the long run. Administration officials have expressed interest in raising the amount that federal employees contribute to their pensions, said sources of The Washington Post. The Republicans have suggested that the civilian labour force contribute more to its retirement in the future, effectively tuning 5% of wages. The administration has not been willing to go so far in talks led by Vice President Biden. The Treasury Secretary has used special programs to avoid negligence six times since 1985. The most protracted delay in raising the debt line came in 1995 after the Congress Republicans swept to power under the Clinton administration. But today the government needs much more money to cover its obligations than before, making the specific measures less effective than they used to be. The government needs about $125 billion more a month than it takes in every month. In a letter released last week to Sen. Michael Bennet (D-Colo.), Geithner wrote that a standard would risk a “double-dip” recession. “Default would not only increase loan costs for the federal government, but also for families, businesses and local authorities — reducing investment and creating jobs throughout the economy,” Geithner wrote. But several prominent congressional Republicans have dismissed the Obama administration's claim that the country would have dire consequences if Congress did not vote to raise the federal limit of government borrowing by August. Many of the skeptics are affiliated with the tea party. In the Senate, freshman Sen. Pat Toomey (R-Pa.) has said the Obama administration has exaggerated the effects of hitting the standard mark. Breaking the border would only cause a partial state shutdown. Second freshman Republicans have said Geithner could raise money to avoid negligence by selling investments in private companies. The Republican Study Committee, representing more than 150 legislators, sent a letter to Geithner last week calling for more information on the August 2 deadline. More from The Washington Post: READ: 2 chambers: GOP, tea party less likely to see potential standards as “disaster” READ: Wonkbook: Happy debt ceiling day! READ: Boehner: Clearly, the United States must raise the debt limit READ: A story of many, many, many caps READ: Debt ceilings, deficit solution: Epic federal yard sales? SEE PHOTOS: Key actors in the debate over US fiscal policy CHART: A look at sovereign debt and debt ceilings over the past 30 years READ: More news from Post Business.. WSJ's Paul Vigna reports the nation's nearly $14.3 trillion debt ceiling will be broken today. NASDAQ also withdrew its bid for NYSE. (AP Photo/Henny Ray Abrams, file) The U.S. government is expected to hit the debt ceiling of $14,294 trillion Monday, triggering an uncertain, 11-week political scramble to avoid a standard. The Treasury said Monday that it will stop issuing and reinvesting government securities in some state pension plans, part of a series of measures aimed at delaying a default by August 2. The Treasury move buys time for the White House and Congressional leaders to reach a deficit reduction agreement that could pave the way for enough lawmakers to vote to increase the amount of money Congress allows the nation to borrow. Gene Sperling, head of the National Economic Council, said reaching the debt ceiling "should be a warning clock to the political system that it is time to get seriously at preserving our full faith and credit." The Obama administration says a derelict event would tip the United States back into a financial crisis. However, the road to an agreement is still unclear, even for those who negotiate. The White House and Republicans are giving conflicting signals as to how close they are to a deal. Vice President Joe Biden said the outlines of an agreement were taking shape. House Speaker John Boehner painted another picture Sunday, saying on CBS's Face the Nation "I'm not seeing any real action." Many Republicans and some Democrats have said that they will not vote to raise the debt ceiling but an associated deal to reduce spending or address such longer-term fiscal problems as healthcare costs. They claim that the debt ceiling is a good place to force changes needed to secure the nation's solvency. People familiar with the negotiations led by Mr. Biden say they are looking at cuts in agricultural subsidies and federal pension programs, intensified anti-fraud efforts, increased premiums for pension plans backed by the Pension Benefit Guaranty Corporation and sales of wireless spectrum and state properties. The talks are at an early stage and potential areas of agreement are preliminary, warning officials. But Democrats have not ruled out any thorny issues, according to people familiar with the negotiations, including reforms of the pension program for federal workers. The areas being investigated amount to a sliver of the $4 trillion target officials have set for deficit reduction over the next 10 years. And taxes remain a roadblock. Republican leaders say tax increases cannot be part of any deficit plan, but White House officials have said that all plans must include revenue increases. Mr. Sperling said the White House wants an agreement "weeks in advance instead of being in stalemate by the end of July where everything comes down to the thread." Mr. Boehner seemed to agree, saying Sunday a deal not "must wait until the eleventh hour." A group of house Republicans have questioned the validity of the August deadline, suggesting that the Treasury could sell assets, such as gold reserves, to continue paying creditors. Treasury officials have rejected the idea, but could be forced to reconsider if the talks stay. The United States government has reached the debt ceiling in the past, notably in 1995 and 1996 when the Clinton administration and House Republicans offset over state spending. In the end, however, legislators reached agreements and the country has not neglected its debt in modern history. Bankers and business leaders warned legislators last week that default could trigger a financial crisis, which would result in interest rates skyrocketing, making it more difficult for families and businesses to borrow. This is because a default would call into question the value of US sovereign debt, long regarded as one of the world's safest investments. Many loans and business deals are based on the value of the treasury, and if their value were eroded, the effect would be felt generally. Since the government is estimated to have a deficit of $1.5 trillion this year, it must borrow money to cover its obligations, ranging from military expenditure to interest on existing debts. Legislators have not felt pressured to act yet in part because markets have remained stable, and the return on US public debt remains low. Juggling the Books Treasury has several steps that can be taken to avoid exceeding the debt ceiling Enlarge Image Close Returns on 10-year-old Treasury banknotes have dropped from more than 3.7% in early February—when Fed officials and others began to warn of disastrous consequences if the debt limit was exceeded—to below 3.2%. If investors had serious concerns about default, they would likely sell bonds, which in turn would increase their return. Instead, bond yields have partly declined as the economy seems to slow down. The prices of raw materials have also fallen, holding down inflation and pushing bond yields downwards. If officials arrive for close to August 2, government officials may have to decide which of the country's creditors will pay and what payments they will cancel or stop. Civil servants have so far deviated from questions as to which creditors would be prioritised. Finance Minister Timothy Geithner said in a letter to Sen. Michael Bennet (D., Colo.) last week that failure to raise the debt ceiling would lead to a default on obligations "such as payments to our service members, citizens, investors and businesses." —Jon Hilsenrath and Naftali Bendavid contributed to this article. Write to Damian Paletta at damian.paletta@wsj.com ................................................