Published July 25, 2011
While officials from the Obama Administration raised their rhetoric over the weekend about the possibility of a debt default if the debt ceiling isn't raised, they privately have been telling top executives at major U.S. banks that such an event won’t happen, FOX Business has learned.
| FOXBusiness
In a series of phone calls, administration officials have told bankers that the administration will not allow a default to happen even if the debt cap isn't raised by the August 2 date Treasury Secretary Tim Geithnersays the government will run out of money to pay all its bills, including obligations to bond holders. Geithner made the rounds on the Sunday talk shows saying a default is imminent if the debt ceiling isn't raised, andPresident Obama issued a similar warning during a Friday press conference after budget negotiations with House Republicans broke down.
While the negotiations to craft a budget remain at an impasse, Republicans and Democrats on Monday began crafting their own plans to cut spending that could lead to an agreement to raise the debt ceiling. It's unclear if a broad agreement can be reached any time soon, but even if a deal is struck, a complicating issue for lawmakers and the administration is the possibility of a downgrade to the US debt rating, which would cut the triple-A rating on the nation's debt to a lower level.Click headline to continue...
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