WASHINGTON, May 14 (UPI) -- U.S. Treasury Secretary Timothy Geithner argued in a letter to Congress that failure to raise the government's debt ceiling would have serious consequences.
Among the more serious effects of a failure to allow the government to continue borrowing would be a double-dip recession, Geithner said in a letter to Sen. Michael Bennet, D-Colo., The Wall Street Journal reported Saturday.
Geithner has warned several times that a failure to raise the $14.29 trillion debt limit would have devastating effects on the economy. In his recent letter, Geithner warned leaving the limit as is beyond Aug. 2, would drive up lending rates, subtract from household wealth and put government entitlement programs at risk.
"Failure to raise the debt limit would force the U.S. to default on these obligations, such as payments to our service members, citizens, investors, and businesses. This would be an unprecedented event in American history," Geithner wrote, calling the damage "catastrophic (and) far-reaching."
House Speaker John Boehner, R-Ohio, has said raising the debt ceiling without dramatically reducing spending and reforming the budget process "would be more irresponsible."
Some Republicans in Congress have said not raising the limit would not affect the U.S. ability to pay existing obligations.
Bennet, one in a small bipartisan group of senators trying to negotiate an agreement on deficit reduction, disagrees with those Republicans, The Denver Post reported.
"As this letter states, playing politics with the debt limit would rattle the capital markets, blow an even bigger hole in our deficit and would likely throw our economy into another deep recession," Bennet, who had asked Geithner to forecast a worst-case scenario if the limit is not raised, said Saturday. "That is unacceptable, especially since Congress has the power to prevent it."