Credit unions: Don't let debt limit be delayed by spending fight

A group of federal credit unions has asked Congress to to take "immediate action" to raise the federal debt limit, and warned that lawmakers may need to table broader budget talks to get it done.

In a letter sent to congressional leaders Tuesday, the National Association of Federal Credit Unions (NAFCU) said the need to raise the debt limit was becoming urgent as the government reached the $14.3 trillion ceiling Monday.

"With the limit officially being reached yesterday, there is no question that Congress and the administration are on a strict timeline to resolve this issue," wrote Tun Wai, NAFCU's chief economist and vice president of research.

He warned that the nation's "extremely fragile" economic recovery was in danger due to the debt-limit standoff.

While leaders on both sides of the aisle have acknowledged that the debt limit will ultimately need to be raised, Republicans say they will not support an increase that is not paired with significant spending cuts or reforms.

Wai recognized that the nation's fiscal situation is in need of improvement, but warned that increasing the debt limit should not be delayed because of that fight.

"Broad based budget policies may need to be prioritized apart from the question on the federal debt limit due to the timely nature of action on this issue," he wrote. "In fact, just the perception that lawmakers may not raise the debt limit has the ability to cause negative economic consequences."

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