June 18, 2011
SAO PAULO — The International Monetary Fund on Friday joined calls for the US Congress to raise the country’s debt limit, warning that failure to act would risk a major global market upheaval.
“For the United States, it is critical to immediately address the debt ceiling and launch a deficit reduction plan that includes entitlement reform and revenue-raising tax reform,” the IMF said in an update of its April forecasts issued in Sao Paulo.
The US government hit its legal borrowing limit of $14.29 trillion on May 16. The Treasury has taken extraordinary technical measures to avert a debt default, but says it will run out of maneuvering room by August 2.
The issue of raising the debt limit is bogged down in Congress, where President Barack Obama’s Democrats are at loggerheads with Republicans, who control the House of Representatives.