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WASHINGTON, Sept 26 (Reuters) - Failure by the United States to pay some of its bills in the event Congress fails to raise the $16.7 trillion debt limit by mid-October would be damaging to the U.S. economy by eroding confidence, the head of the Congressional Budget Office said on Thursday.
"Defaulting on any obligation of the U.S. government would be a dangerous gamble. In a very uncertain world, the one thing everyone has been able to count on is that the U.S. government will pay its bills on time," CBO director Doug Elmendorf told the House Budget Committee.
He added that this goes for any obligation, whether interest on the federal debt or a social security payment, as it would be difficult for markets to gauge differences between obligations.