The U.S. government is set to run out of borrowing authority in mid-October, leaving the government at a high risk of not having enough cash to fund all operations, including paying Social Security checks and military salaries, officials said on Monday.Washington Post asserted that The mid-October date creates a new cliffhanger for Washington, one that's on the early side of what many analysts had anticipated. If Congress does not raise the borrowing limit, the nation could default on its obligations to creditors.Employers usually prefer to make employees pay more as costs increase. Cutting benefit options entirely is much rarer.In exchange for raising the $16.7 trillion debt limit, Republicans are demanding significant new spending cuts — and some are insisting on defunding or delaying President Obama's signature health care law. Obama says he will not negotiate over the debt limit. The Treasury Department could not say exactly when Congress would have to raise the debt limit or risk a federal default. In a letter to House Speaker John Boehner (R-Ohio), however, Treasury Secretary Jack Lew warned that the government would only have $50 billion in cash in mid-october, which may be “insufficient to cover net expenditures for an extended period of time.” Lew said that if investors begin to doubt the U.S. government's ability to pay back loans, “the United States could face an immediate cash shortfall. Indeed, such a scenario could undermine financial markets and result in significant disruptions to our economy.” A debt limit battle between the White House and Congress in 2011 threatened a new global economic crisis. Earlier this year, a new fight over the debt limit was averted, but there seems less of a chance of a peaceful deal this October. The debate over the nation's borrowing limit is one of two looming economic fights. The first, set to hit next month, is over whether to renew a measure funding the government past Sept. 30, when the existing budget mechanism expires. For Obama, the key question is whether he will find a way to roll back the deep spending cuts known as sequestration. Republicans and Democrats have been coalescing around an idea to pass a short-term funding measure and resolve both issues when the debt limit deadline comes up. But it appears as though that deadline will hit sooner than anticipated. The Obama administration had previously said only that the debt limit deadline would come after Labor Day.
