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Jacob Lew: USA may go bankrupt in mid-October

The US Treasury Secretary specified that in three weeks the Treasury’s cash-on-hand will be reduced to $30 billion

Photo ITAR-TASS/EPA/JUSTIN LANE

Photo ITAR-TASS/EPA/JUSTIN LANE

WASHINGTON, September 25. (Itar-Tass). - The United States may go bankrupt already October 17 in case it doesn’t hurry to pass a law raising the national debt limit. Such a warning was made by U.S. Treasury Secretary Jacob Lew in a letter to U.S. Congress leaders released today.

The Treasury Secretary said that if the government wouldn’t be able to pay its bills, this may lead to a catastrophe. Lew claims that the aftermath for the US would be more severe this time than in 2001 when a similar situation triggered a credit rating drop.

Jacob Lew specified that in three weeks the Treasury’s cash-on-hand will be reduced to $30 billion while the country’s financial commitments in this period may be twice as large. The Treasury Secretary urged the Congress to raise the debt limit that was set at $16.7 trillion in May and confirmed that President Obama’s Administration won’t negotiate it with congressional Republicans.

In order to avoid default, the US has been undertaking ‘extraordinary measures’ to meet its debt obligations. In particular, these measures include delaying pension fund payments.

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