The Senate Finance Committee holds a hearing with Treasury Secretary Jacob "Jack" Lew to discuss the possible economic effects of the U.S. reaching the debt limit.
Chairman Max Baucus (D-MT) will question the secretary on what the U.S. reaching the debt limit would mean for world markets and for the borrowing power of the country in the future.
In an September 25 letter sent to the congressional leadership, Secretary Lew warned of the risks of the debt limit being reached:
"The debt limit impasse that took place in 2011 caused significant harm to the economy and a downgrade to the credit rating of the United States. The drawn-out dispute caused business uncertainty to increase, consumer confidence to drop, and financial markets to fall. If Congress were to repeat that brinksmanship in 2013, it could inflict even greater harm on the economy. And if the government should ultimately become unable to pay all of its bills, the results could be catastrophic."
Sec. Lew followed up this correspondence with another letter on October 1 which stated that the Treasury Department has begun to put emergency measures in place to push the deadline as far as possible, which he stated to be October 17.