Lew warns Congress he will run out of manoeuvring room on US debt ceiling by late February

WASHINGTON – Treasury Secretary Jacob Lew is telling Congress that by late February he will run out of steps he can take to avoid a first-ever default on U.S. debt.

Lew says he now thinks he will exhaust the bookkeeping manoeuvrs he can make to avoid breaching the federal borrowing limit sooner than previously thought. He had estimated in December that he could avoid a default until late February or early March.

Under an agreement that ended the partial government shutdown in October, Congress suspended the debt limit until Feb. 7. After then, Lew would start using the bookkeeping manoeuvrs.

He urged Congress to raise the limit before Feb. 7.

Some Republicans hope to use the debt limit as leverage to force the Obama administration to agree to more government spending cuts.