Markets Worry Trump May Have To Use Obama’s Secret Debt Ceiling Plan

  • Obama in 2011 prepared contingency to prioritize repayments
  • Prioritization a ‘dangerous precedent,’ Citigroup says

Deep within the Treasury Department sits a once-secret plan written by the Obama administration that could lead to the first-ever default on U.S. debt. Bond traders are worried that Donald Trump’s Treasury secretary may have to use it.

The U.S. government will reach its statutory limit on borrowing some time in October, the Congressional Budget Office estimates. The Trump administration has asked Congress to raise the ceiling before then, but it is running into the same complications the Obama White House encountered: lawmakers, mostly Republicans, who want to use the debt limit as leverage for controversial policy changes.

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