U.S. warns may not be able to pay bills after August 2

Reuters News
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Posted: Jul 27, 2011 2:33 PM
U.S. warns may not be able to pay bills after August 2

WASHINGTON (Reuters) - The U.S. Treasury said on Wednesday the government will no longer be able to borrow funds on August 2 and warned there was no way to guarantee the country would be able to pay all its bills if Congress did not raise the debt cap.

Treasury said tax receipts were in line with expectations after Wall Street analysts suggested that stronger-than-expected tax income meant that the United States would not default on its obligations until mid-August.

"Tax receipts were as expected for June and July. The fact remains that the U.S. will exhaust borrowing authority on August 2 and after that date there is no way to guarantee we will be able to meet all of the nation's obligations," a Treasury spokeswoman said in a statement.

(Reporting by Rachelle Younglai; Editing by James Dalgleish)