Fed Chairman: Raise the Debt Ceiling


Federal Reserve Chairman Ben Bernanke is urging republicans to support a vote to raise the nation's borrowing limit.

He says even a short delay in making payments on the nation's debt would cause severe disruptions in the financial markets and jeopardize America's prized AAA credit rating.

The U.S. must raise the $14.3 trillion borrowing limit by August 2 or it will default on its debt.

"Recently, negotiations over our long-run fiscal policies have become tied to the issue of raising the statutory limit for federal debt," Bernanke said. "I fully understand the desire to use the debt limit deadline to force some necessary and difficult fiscal policy adjustments, but the debt limit is the wrong tool for that important job."

He went on to say that failing to raise the debt limit would require the federal government to delay or renege on payments for obligations already entered into.

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