US Secretary of the Treasury Timothy Geithner says that the country may suffer a default and urged the congress to raise the limit of state debt, which currently totals $16.394 trillion.
He warned Speaker of the House of Representatives John Boehner that the US may face recession in mid-February or early March.
US authorities proposed release of a $1 trillion banknote to pay the debt, only to be scrapped.
The congress approved the idea to stop raising taxes for the middle class and the poor. The rich, 2% of the population, will have to help cope with the debt. Tax benefits were lifted for families and individuals with income of $450,000 and $400,000 respectively to stop the default.
