U.S. Treasury prepares for the worst as debt-limit vote nears

04/27/2011 | Washington Post, The

The U.S. government is quietly adjusting accounts and conserving cash, preparing for a congressional standoff to block an increase in the national debt limit, The Washington Post reported. A decades-old legal opinion gives the Treasury Department authority to pay interest to holders of Treasury securities first, putting them ahead of other creditors. Treasury Secretary Timothy Geithner has said he can stave off a default until early July, assuming the nation's borrowing limit is reached in mid-May.

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