Feds Hit Debt Limit Today President warns default 'could unravel entire financial system' By Mark Russell, Newser Staff Posted May 16, 2011 3:20 AM CDT Updated May 16, 2011 7:54 AM CDT 33 comments Comments US President Barack Obama has warned the US could be plunged into a recession if it defaults on its debts. (Getty Images) (Newser) – The federal government is slated to hit the $14.3 trillion debt ceiling today, boosting pressure on the White House to reach a deal with House Republicans to raise that limit. Hitting that ceiling won't immediately affect government finances, notes the AFP, because an unanticipated boost in last month's tax revenues and some short-term adjustments identified by the Treasury will provide about 10 weeks of "wiggle-room," delaying debt default until Aug. 2. In remarks broadcast on CBS, Obama yesterday argued that failing to raise the ceiling will plunge the nation back into recession, reports Reuters. "Let's not have the kind of linkage where we're even talking about not raising the debt ceiling," said President Obama. "If investors around the world thought that the full faith and credit of the United States was not being backed up, if they thought that we might renege on our IOUs, it could unravel the entire financial system," he warned. A think tank report to be released today says that defaulting on the debt would destroy 640,000 jobs, cause stock markets to drop sharply, and trigger another recession. Find out what House Speaker John Boehner thinks about raising the debt ceiling here.