The federal government reached its $7.4 trillion debt ceiling Thursday, forcing Treasury Secretary John Snow to delay contributing to one of the federal employees’ pension systems to avoid running out of cash and possibly defaulting on government debt.
The situation will probably prove temporary, as it has in the past. Congressional leaders said that when they return for a lame-duck session after the election, they will raise the debt ceiling to allow the government to borrow the money it needs to pay its bills. At that point, any overdue contributions to the pension fund will be paid, with interest. Since 2002, Congress has raised the borrowing limit by more than $1.4 trillion, as the government ran increasingly large deficits of $158 billion in 2002, $375 billion in 2003 and $413 billion for fiscal 2004, which ended in September.