U.S. Treasury Secretary Henry Paulson Wednesday urged quick actions from the Democrats-controlled Congress to raise the national debt limit, saying the U.S. government will hit the current debt ceiling on Oct. 1.
In a letter to congressional leaders, Paulson said that it was essential to protect the "full faith and credit" of the United States, especially at a time of financial market turmoil.
"The full faith and credit of the United States, to which we all remain committed, is a national asset and a cornerstone of the global financial system," said Paulson in his letter.
"In light of current developments in financial markets, which would be exacerbated by uncertainty in the Treasuries market, I urge the Senate to pass the legislation reported by the Finance Committee to increase the debt limit as soon as possible," the secretary said.
According to data now available, he said, the Treasury expects to hit the current debt ceiling on Oct. 1.
Earlier this month, the Senate Finance Committee approved to boost the national debt limit to 9.82 trillion dollars, an increase of 850 billion dollars from the current level of 8.965 trillion dollars.
The national debt is the total accumulation of annual budget deficits, which must be financed with borrowed money.
The limit of the national debt has been raised several times since President George W. Bush took office in 2001. The last time was in March 2006 when Congress agreed to raise the debt ceiling by 781 billion dollars.
The Treasury Department has resorted to numerous accounting maneuvers to pay its bills while the government waited for Congress to expand its borrowing authority.
In February last year, for example, the Bush administration said it had begun to use a government employee pension fund to avoid hitting the then national debt limit of 8.184 trillion dollars.
However, such measures "would create unnecessary uncertainty for the financial markets and result in costs to the government," Paulson argued late July this year, when he urged quick actions from Congress to increase the debt ceiling.
Such actions "should be reserved only for extraordinary circumstances, and should be avoided," he said.
The House approved an increase in the national debt limit in May, but the full Senate has yet to act to raise the limit.
Source: Xinhua
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