Senate leader McConnell says no chance of U.S. default on debt

WASHINGTON (Reuters) – Senate Majority Leader Mitch McConnell declined on Tuesday to predict when the U.S. Congress would act to approve a new U.S. debt ceiling, but said he saw no chance of default on debt payments.

“There will not be any question that we will raise the debt ceiling,” McConnell told reporters. “I don’t think there’s any chance that we’ll allow the country to default.”

Meanwhile, House of Representatives Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Tuesday discussed ways to reach agreement on extending U.S. borrowing authority and spending limits for the 2020 fiscal year that begins on Oct. 1.

A Pelosi spokesman said the 20-minute telephone conversation was productive and the two plan to speak again on Wednesday.

By September or October, the Treasury Department could exhaust its current borrowing authority, adding pressure on Congress and the Trump administration to reach a deal on a new extension.

Congress is scheduled to be in recess through almost all of August and the first week of September, raising questions about whether a debt limit and spending deal can be enacted before the break.

(Reporting by Richard Cowan and Doina Chiacu; Writing by David Alexander Editing by Susan Thomas and Cynthia Osterman)