U.S. Treasury reaffirms deadline for debt talks

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The U.S. Treasury Department on Friday reaffirmed that Aug. 2 will be the deadline for ongoing talks to raise the nation's borrowing limit.

"The Treasury Department continues to project that the United States will exhaust its borrowing authority under the debt limit on Aug. 2, 2011," Assistant Treasury Secretary Mary Miller said in a statement. "Secretary Geithner urges Congress to avoid the catastrophic economic and market consequences of a default crisis by raising the statutory debt limit in a timely manner."

The statement was the latest warning from the Obama administration to Republicans as the two parties are engaged in tough negotiations and have not inked a deal to raise the 14.29- trillion-U.S. dollar debt ceiling.

With just over a month until the Aug. 2 deadline before the world's largest economy might default on its obligations, Obama this week began to lead the debt talks, seeking to raise the borrowing limit.

Obama Wednesday urged Congressional leaders to ditch short-term and selfish mindset in doing their work, because if the U.S. government defaults on its debt, the first ever in the American history, the consequence for the U.S. economy would be " significant and unpredictable."

U.S. Senate Majority Leader Harry Reid announced Thursday that the chamber would cancel its week-long recess for the July 4 U.S. Independence Day holiday to focus on the deadlock in deficit reduction talks, but analysts said it was difficult to bridge sharp stance differences between the two parties within weeks.

The U.S. federal debt ceiling should be raised quickly to avoid a severe shock to the global economy and financial markets, the Washington-based IMF warned on Wednesday in its annual checkup over the economic and financial situation of its largest shareholder.